It’s all in the expectations, and as the key US data was announced yesterday the dollar fell against all major peers.
US data has been disappointing across the board over the course of the week and with sentiment against the dollar, the currency fell and has maintained its decline today - down 0.3% against a basket of peers, taking it 0.9% below a four-year high on Monday. Only the GDP result on Monday showed any sign of a recovering economy in the third quarter, providing 3.9% versus the forecast of 3.3%, which was already low against the previous of 3.5%.
The US data:
On Monday, CB Consumer Confidence was 88.7 versus an expectation of 95.9 and down on the previous month of 94.1. This determines the general feeling of consumers with regard to the economic situation of the state.
On Wednesday, Core Durable Goods Orders fell dramatically to -0.9% versus a forecast of 0.5% and a previous of 0.2%.
Initial jobless claims hit an 11-week high with figures of 313K versus optimistic expectations of 287K, up from the previous at 292K.
New Home Sales were also down in October to 458k versus an expectation of 471k, though slightly up from the previous month’s figures of 455K.
Importantly, the Pending Home Sales figure that gives an insight to future spending and growth, were also down on expectations at -1.1% versus 0.9%, falling from the previous figure of 0.6%.
Typically, a rise in the index readings has a positive impact on the currency and vice versa, therefore with these figures the dollar toppled against the euro, the yen, sterling and the kiwi.
EURUSD: dollar down from Monday’s figure of 1.23618 to today at 1.25293, though some of this fall may be credited to the European Central Bank’s announcement that its QE programme would probably not start until early 2015, and the European Commission’s statement of intent for a €315 billion infrastructure investment programme.
USDJPY: dollar down from Monday’s figure of 118.562 to today at 117.292
NZDUSD: dollar down from Monday’s figure of 0.77643 to today at 0.79209
GBPUSD: dollar down from Monday’s figure of 1.56475 to today at 1.58157, taking sterling up by over 0.6%, signaling growth of a possible 0.5% in the fourth quarter of the year.
AUDUSD: dollar also down when yesterday’s figures were announced from 0.84800 to 0.86073
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