The Australian dollar and New Zealand dollar both drifted lower today

The US dollar fell vs. most major currencies with data showing weakness in the US economy. The Consumer Price Index plummeted 1% as analysts forecast a 0.8% decline. This was the biggest drop since the Labor Department began monthly data in 1947. Core prices also declined 0.1%, despite forecasts of a 0.1% increase. Data from the Commerce Department showed that new-home starts fell 4.5% last month, and building permits dropped 12%. Many economists believe that the US is already in recession although it hasn’t been formally declared.

The euro rose against the dollar with weak US economic data. With no major economic news from the Euro-Zone, the euro is tracking US data.

The British pound strengthened sharply against the dollar as the Bank of England minutes showed the BoE voted 9-0 in favor of cutting rates by 150 basis points in their last meeting. The central bank had pondered cutting interest rates by as much as 200 basis points. Data showed that British factory orders continued fall in November, but picked up slightly from last month from -39 to -38. Companies’ expectations for output in the coming months fell to -42 in November from -31.

The Japanese yen strengthened against the dollar after US government data showed consumer prices posted a record decline and housing starts fell.
Investors bought the safe-haven currency amid continuing weakness in the global economy.

The Canadian dollar fell against the dollar after Bank of Canada Governor Mark Carney commented on the struggles faced by the economy. Carney said that risks of lower economic growth and inflation were greater than they were a month ago and that the central bank would likely have to cut interest rates further.

The Australian dollar and New Zealand dollar both drifted lower today as Asian stocks edging lower kept investors risk-averse. With inflation expected to continue to drop from falling commodity prices, analysts expect both central banks to cut interest rates by 75 - 100 basis points in their next meeting to help bolster their respective economies.

The Mexican peso lowered against the dollar after weak US government data.
The US is Mexico’s largest trading partner as more than 80% of its exports go to the US.