The dollar strengthened against its peers today hitting new 3 week highs after having overlooked discouraging US housing data as data showing solid economic growth released on Friday continued to support the greenback. The US pending home sales index tanked 2.5% reaching its lowest level in 1 year in January while experts forecast an increase of 0.5%. The Chicago purchasing managers’ index plummeted from a reading of 55.6 in January to 47.6 in February while experts forecast the index to decline to a reading of 53.0. The dollar maintained support from US GDP data released on Friday which highlighted a drawdown in the economy which was not as great as originally anticipated. The US dollar index rose 0.21% trading at 3 week highs of 98.34.
The euro weakened against the dollar with the pair down 0.58% trading at 1.0870 off its session low of 1.0859 after having come off its session high of 1.0962 reached earlier in the day. Euro zone consumer price inflation dropped 0.2% in February after a rise of 0.3% in January while experts forecast an increase of 0.1%. This reading was the first below zero since September, still far away from the European Central Bank’s target of near but just under 2.0%. Core CPI was up 0.7% in February compounding expectations for an increase of 0.9%.
The pound held its ground against the dollar with the pair trading at 1.3907 off its session high of 1.3946 after having come off its session low of 1.3835 reached earlier in the day. The pound was trading at 7 year lows after data revealed that UK net individual lending increased by 5.3 billion pounds in January following an increase of 4.3 billion pounds in December. The data surpassed analysts’ forecasts for an increase of 5.2 billion. The pound maintained pressure to the downside over growing doubt surrounding the fate of Britain’s European Union membership.
The yen strengthened against the dollar with the pair retreating 1% trading at 112.88 off its session low of 112.66 after having come off its session high of 113.98 reached earlier in the day. The yen was supported by its traditional safe haven status following moves by the People’s Bank of China to devalue the yuan and boost market liquidity which intensified worry over the state of the world’s second largest economy. The yen was also underpinned by a lack of definitive initiatives to jump start the global economy following a rough start at the beginning of the year after G20 leaders met over the weekend.
The Australian and Canadian dollars strengthened while the New Zealand dollar weakened against the greenback after discouraging data was released out of Australia and New Zealand and oil prices were on the rise. The Aussie gained 0.13% against the dollar with the pair trading at 0.7136 off its session high of 0.7168 after having come off its session low of 0.7108 reached earlier in the day. The kiwi dollar lost 0.74% against the dollar with the pair trading at 0.6584 off its session high of 0.6620 after having come off its session low of 0.6565 reached earlier in the day. Company operating profits in Australia dropped 2.8% in the 4th quarter compounding forecasts for a 1.8% decline. The ANZ business confidence index for New Zealand dropped from a reading of 23.0 in December to 7.1 in January. The loonie edged up 0.09% against the greenback with the pair trading at 1.3525 off its session low of 1.3481 after having come off its session high of 1.3586 reached earlier in the day. The loonie maintained support trading at 3 month highs as oil traded over $33 per barrel. Raw materials price index for Canada dropped 0.4% in January following a decline of 5.2% in December while experts forecast a decrease of 3.3%.
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