The dollar remained weak in afternoon New York trading on Friday, holding losses posted against the euro and pound earlier in the day. The buck also came under considerable pressure against the yen, sinking to its lowest level in nearly a month in earlier trading.
The move came as better-than-expected earnings figures and economic reports from the U.S. sparked risk appetite, prompting movement out of the relative safe haven of the dollar and into higher yielding currencies.
Earlier in the day, investors digested better-than-expected figures from Ford (F) and Microsoft (MSFT), in-line numbers from Honeywell International Inc. (HON) and results from 3M (MMM) that fell short of expectations.
On the economic front, the U.S. Commerce Department reported a modest decrease in new home sales in March, but the annual rate of new home sales came in well above economist estimates due to an upward revision to February sales.
Meanwhile, another report from the Commerce Department showed that new orders for durable goods fell by less than expected in March, although the report showed a notable downward revision to the growth seen in February.
Against the euro, the greenback dipped to 1.3301 in earlier trading, its lowest level in just over a week. Moving into the late afternoon hours, the buck continues to linger just below the mark, moving to 1.3253. The move came after the buck reached a monthly high of 1.2887 on Monday.
A better-than-expected survey on the business outlook from the Eurozone's largest economy helped to bolster the 16-nation currency. The results of the IFO business survey for Germany revealed that the business climate index rose to 83.7 in April from 82.1 in March. Meanwhile, economists had expected a slight increase to 82.3.
The IFO expectations index climbed to 83.9 from 81.6, while the forecast was for the reading to increase to 82.6. Similarly, the gauge for current conditions rose to 83.6 from 82.7, in contrast to estimates of a decrease to 82.1.
After slipping to a weekly low of 1.4773 against the sterling in afternoon trading, the greenback moved off of the mark, climbing to 1.4657 heading into the early evening hours. With, the move, the dollar has drifted higher on the day.
Earlier in the week, the dollar climbed to its highest level in nearly three weeks, with a quote of 1.4397. Late in the previous week, the greenback hit its lowest level since mid-January against the sterling, posting a quote of 1.5070.
U.K.'s gross domestic product, or GDP, contracted 1.9 percent on a quarter-on-quarter basis in the first quarter of 2009, compared with a decrease of 1.6 percent in the fourth quarter of 2008, the Office for National Statistics said. It was the biggest quarterly decline since the third quarter of 1979. Economists had expected the economy to contract 1.5 percent in the first quarter.
On an annual basis, GDP fell 4.1 percent in the first three months of the year following a 2 percent decline in the final quarter of the previous year, while economists were expecting the economy to shrink 3.8 percent.
The greenback plunged against the yen, falling to 96.64 earlier this morning, its lowest level in nearly a month. The buck has pulled away from the mark heading into the late afternoon hours, climbing to 97.10. The move came after the dollar largely leveled off since hitting a 3-month high of 101.43 yen on April 6th.
Japan's All Industry Activity index dropped 2 percent month-on-month in February on a seasonally adjusted basis following a 1.7 percent decline in January, the Ministry of Economy, Trade and Industry or METI said today. The decrease came in line with economists' expectations. Moreover, the index declined for the fifth straight month.
Bank of Japan Governor Masaaki Shirakawa said the U.S. economy needs painful measures to get out of the recession.
Addressing the Japan Society in New York on Thursday, Shirakawa said, I think the U.S. economy needs to work out excesses, which include unsustainable financial leverage, household over-indebtedness, and perhaps the over-extension of the financial industry. This will be painful but inescapable.
On the U.S. economic front, a government report showed that new home sales fell 0.6 percent to an annual rate of 356,000 in March from a revised February rate of 358,000. Economists had expected new home sales to remain unchanged compared to the 337,000 originally reported for the previous month.
Meanwhile, additional economic data showed that durable goods orders fell 0.8 percent in March following a downwardly revised 2.1 percent increase in February. Economists had expected orders to fall 1.5 percent compared to the 3.5 percent increase that had been reported for the previous month.
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