RTTNews - The dollar weakened versus other major currencies on Tuesday as traders questioned its gains from earlier in the month, which were predicated on the US economy emerging from recession and the Federal Reserve raising interest rates sooner than expected.
US wholesale inventories fell by a little more than expected in the month of April, according to a report released by the Commerce Department on Tuesday, with the report also showing a modest decrease in wholesale sales.
The dollar eased versus the euro, dropping to 1.4100 from a 10-day high of 1.3804. With the loss, the dollar moved back towards a 5-month low of 1.4338.
Germany's exports contracted at an even faster pace annually in April, as global demand continued to remain weak, an official report showed Tuesday.
Data released by the Federal Statistical Office said exports dropped 28.7% year-on-year in April, faster than a 16.2% fall in March, and was the biggest drop since the country's exports embarked on a declining trend in November last year. Further, the latest decline is reportedly the largest on record.
Against the sterling, the dollar plummeted to 1.6360, having dropped a full 5 cents from a 2-week high set on Monday. The dollar moved back toward a 6-month low of 1.6662, set a week ago.
House prices in the UK dropped 13% year-on-year in April, after falling 13.6% in March, the Department of Communities and Local government said in a report Tuesday. Economists expected a fall of 13.3%.
The dollar also lost ground to the yen, easing to 97.30 from a recently-visited 4-week high of 98.87. Tuesday, a report from Japan's Cabinet Office showed that the leading index increased to 76.5 in April from 75.5 in March. Economists expected the reading to come in at 77.2.
At the same time, the coincident index moved up to 85.8 from 84.8 in the previous month. The lagging index, however, decreased to 86.1 from 87.5 in March.
The U.S. Department of Treasury announced Tuesday that 10 of the largest U.S. financial institutions borrowing money from the Treasury are planning on paying back their loans. Organizations such as JP Morgan Chase (JPM), U.S. Bancorp (USB) and Bank of New York Mellon (BK) will repay a total of $68 billion.
Combined with repayments received to date from other institutions, the Treasury will have received approximately $70 billion in repayments from capital purchase program, or CPP, participants. The Treasury invested nearly $200 billion in over 600 banks across the country as part of an effort to stabilize the financial system.
Meanwhile, a report showed that wholesale inventories fell 1.4 percent in April following a revised 1.8 percent decrease in March. Economists had expected inventories to decrease by about 1.1 percent compared to the 1.6 percent drop originally reported for the previous month.
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