Dollar Still On The Ropes Versus Other Majors

  @ibtimes on August 05 2009 2:36 PM

RTTNews - The dollar remained under pressure versus other major currencies Tuesday, once again failing to make much of a dent in its dramatic recent losses.

Even with stocks pulling back and risk appetite diminishing, traders resisted a move back to the safety of the world's reserver currency amid renewed faith in the health of the global economy.

While the buck did not set fresh lows versus most majors, it did extend a 10-month trough versus the surging sterling. Before traders were treated to a trip of economic reports including a key prelude to Friday's jobs report, the dollar dropped to 1.7044 against the pound -- its lowest level since last fall.

The dollar barely budged versus the euro, staying near 1.4400. On Monday, the dollar hit an 8-month low of 1.4444, and has since been on pause.

The European Central Bank's interest rate decision is due Thursday morning. The ECB is expected to leave rates unchanged, but comments afterward could give hints of future measures to boost the economy. The Bank of England is also expected to leave rates alone tomorrow.

The dollar gave back its overnight gains versus the loonie, slipping back a Canadian cent to C$1.0690. With the loss, the dollar toward Monday's 2009 low of C$1.0630.

Meanwhile, the dollar continued to bounce back and forth near 95 yen, with traders expressing conviction about either of the out-of-fashion low-yielders.

Private sector employment showed another notable decline in the month of July, according to a report released by Automatic Data Processing, Inc. (ADP) on Wednesday, although the pace of job losses slowed to its slowest rate since October of 2008.

The report showed that non-farm private employment fell by 371,000 jobs in July following a revised decrease of 463,000 jobs in June.

With a jump in orders for non-durable goods more than offsetting a decrease in orders for durable goods, the Commerce Department released a report on Wednesday showing an unexpected increase in new orders for manufactured goods in June. The report showed that orders for manufactured goods rose 0.4 percent in June following a revised 1.1 percent increase in May.

Wednesday morning, the Institute for Supply Management released its report on activity in the service sector in the month of July, showing that the pace of contraction in the sector unexpectedly accelerated from the previous month.

The ISM said its index of activity in the sector edged down to 46.4 in July from 47.0 in June, with a reading below 50 indicating a contraction in the sector.

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