The U.S. dollar was mixed versus its major counterparts on Wednesday in New York. The buck retreated against pound and gained on the yen, while showing choppy movement against the euro. The day's volatility came as investors considered the influx of economic data from the world's largest economy.
The dollar gained some ground against the euro in late morning New York, regaining some ground lost earlier in the morning. At about 11 a.m. ET, the euro hovered near midnight's level of 1.3256. The dollar has been stable in the last two sessions after moving off Monday's two-week high.
Traders awaited the European Central Bank's interest rate decision, which is expected on Thursday. The ECB is widely expected to slash rates by 50 basis points to a record-low 1%.
Economic news from the Eurozone continued to be grim as jobless rate stood at 8.5% in February, the highest since May 2006, compared with January's revised 8.3%, the Eurostat reported. The jobless rate stood above the expected 8.3% and the 7.2% recorded in February 2008. The statistical office upwardly revised the unemployment rate for January from 8.2%.
The pace of decline in Eurozone manufacturing activity slowed in March compared to the fall seen in February, reports said citing survey data from Markit Economics.
The purchasing managers' index for the Eurozone manufacturing sector rose to 33.9 in March from a record low of 33.5 in February, but down from a preliminary estimate of 34. A PMI reading above 50 indicates expansion in the sector, while below 50 suggests contraction.
Meanwhile, the dollar continued its weakness against the sterling in the late morning hours, New York Time. After the dollar posted a two-week high of 1.4144 against the pound Monday, the greenback has posted declines over the past two days. The pound continued to move up versus the greenback, posting a level of 1.4397 at about 11 a.m. ET compared to midnight's level of 1.4360. With the pound's rebound, the dollar has returned to Monday's levels.
U.K.'s housing equity withdrawal was estimated at minus GBP 8 billion in the fourth quarter, a quarterly report from the Bank of England revealed. The negative number implies that individuals injected a net total of GBP 8 billion into housing equity in the fourth quarter. Economists had expected a negative balance of GBP 6.8 billion.
Meanwhile, against the yen, the dollar has been hovering near the psychologically important 100 mark throughout the morning. Moving into the early afternoon hours in New York, the buck is sitting at 98.83 after backing off yet another attempt to break the 100 benchmark. The figure has been challenged in recent trading as forward looking news from Japan has put the currency under considerable pressure.
Sentiment among Japan's large manufacturers dropped at a record rate in the first quarter of 2009, posting a diffusion index score of minus 58, the Bank of Japan's Tankan Survey revealed. That was worse than analyst expectations for minus 55 following a reading of minus 24 in the previous quarter. It was the sixth straight quarter of decline. Further, the fall of 34 points from the previous survey in December marked the largest fall on record.
Investors also considered a barrage of economic reports from the U.S earlier today. Disappointing employment data was largely shrugged off as traders instead considered better than expected home sales figures. Traders have marked the sector as one to watch as an indicator of any economic recovery.
The National Association of Realtors said its index of pending home sales rose 2.1 percent to 82.1 in February from a reading of 80.4 in January. The increase by the index came as a surprise to economists, who had expected the reading to come in unchanged compared to the previous month.
Automatic Data Processing's monthly report showed that non-farm private employment fell by 742,000 jobs in March following a revised decrease of 706,000 jobs in February. Economists had expected a decrease of 663,000 jobs compared to the decrease of 697,000 jobs originally reported for the previous month.
Meanwhile, the Institute of Supply Management said its index of activity in the manufacturing sector edged up to 36.3 in March from 35.8 in February, with a reading below 50 indicating a contraction in the sector. Economists had been expecting the index to come in at 36.0.
For comments and feedback: contact firstname.lastname@example.org