The US dollar weakened against most major currencies except for the British pound. After a growth spurt at the end of 2009, speculation that the US economy will slow in the months ahead and keep the Federal Reserve from raising borrowing costs until Q4 pushed the dollar down. Data from the Mortgage Bankers Association reported its seasonally adjusted index of mortgage applications increased 0.5% last week.
The euro recouped some of its losses seen yesterday after stronger than expected industrial output figures from Italy and France. Data from the national statistics office reported industry output in France grew 1.6% month-on-month buoyed by robust growth in the production of transport equipment, while Italy's industrial output rose by 2.6% since December. The euro rally was capped after data from the Federal Statistics Office reported German exports fell by 6.3% on the month in January, the biggest drop in a year.
The British pound took a hit after data showed an unexpected fall in British manufacturing. The Office for National Statistics said manufacturing output fell 0.9% in January in the sharpest monthly decline since last August, confirming the bleak outlook for the country. Data from the National Institute of Economic and Social Research reported Britain's economy grew by a modest 0.3% in the three months to February and expanded by 0.7% since last September.
The Japanese yen slipped and gave back recent gains amid expectations that the Bank of Japan may adopt more monetary easing policies as early as next week.
The Canadian dollar continues to trade range bound as commodity prices stabilize. Oil edged higher towards $82 per barrel while gold prices retreated from highs on the Greek debt plan, which capped any loonie gain against the greenback.
The Australian and New Zealand dollars rose to a 7-week high and 3-week high respectively against the US dollar. Chinese data from the General Administration of Customs showed Chinese exports and imports surged past expectations in February, which pushed commodity prices higher, helping to boost the Aussie and the Kiwi.
10-Year Treasury Note Yield: 3.744%
Dow Jones Industrial Average: 10,596.43 + 32.05