The US dollar was mixed vs. most major currencies as higher stock prices showed investors' increased risk appetite even amid poor US data. ADP Employer Services report showed that US private employers cut 473,000 jobs in June, more than expected but down from the 485,000 jobs lots in May. Mortgage applications fell to a seven-month low last week as the Mortgage Bankers Association said its seasonally adjusted index of mortgage applications decreased 18.9%. The Institute for Supply Management said its index of national factory activity edged up to 44.8 in June from 42.8 in May, though still below the 50.0 mark that divides growth from contraction.
The euro rose against the dollar, supported by higher European stocks and improved manufacturing activity data in the region. European data showed a slowing in the deterioration in the Euro Zone's manufacturing economy. The Markit Eurozone Manufacturing Purchasing Managers Index for June rose to 42.6 from 40.7 in May, though still below the 50.0 mark that divides growth from contraction. German retail sales rose 0.4% on a monthly basis in May.
The British pound fell against the dollar after the previous day's unexpectedly sharp downward revision to UK GDP continued to hamper the currency. The purchasing manager's index rose to 47.0 in June from 45.4 in May. The UK also recorded a bigger-than-expected current account deficit of GBP8.540 billion in the first quarter. Data today showing a slightly better-than-forecast purchasing managers' survey on UK manufacturing was not enough to support the sterling. The British service sector output fell by 0.1% in April, from 0.2% in March.
The Japanese yen was slightly lower against the dollar as Japanese business sentiment improved less than expected in June. The main sentiment index for big manufacturers improved to -48 in June from a record low of -58, though worse than forecasts of -43.
The Canadian dollar strengthened against the dollar as crude oil prices rebounded back above $71 per barrel, helping the commodity-linked currency.
The Australian dollar weakened slightly against the dollar following the release of weak domestic data. Approvals to build new homes fell 12.5% in May, worse than forecasts for a 3.3% rise. The data backs market speculation that the Reserve Bank of Australia will keep rates steady at a record low of 3% at its next policy meeting on July 7, with rates hikes to come later rather than sooner. Positive data for a 1% jump in retail sales was overshadowed by dismal housing data.
The New Zealand dollar also weakened slightly against the dollar with some support for the kiwi from data showing a rebound in New Zealand workers' confidence. The Westpac-McDermott Miller employee confidence index rose to 96.1 from 93.2 in the previous quarter, though it remained negative indicating pessimists outnumber optimists.
10-Year Treasury Note Yield : 3.589%
Dow Jones Industrial Average : 8,562.41 +115.93