The US dollar remained pressured against both the euro and yen after a slew of weak data released out of the US. The Commerce Department said durable goods orders fell 6.2 percent in October, well below the 3 percent fall expected.
In other releases the University of Michigan Consumer Sentiment index fell to 55.3 in November from October's 57.6 level and the US Chicago Purchasing Managers' Index fell to 33.8 in November from 37.8 in October, while unemployment benefits surprisingly fell by 14,000 last week.
Look for the dollar to remain under pressure on the back of the weak data coupled with yesterday’s third quarter GDP downward revision. Trading conditions will be thin for the remainder of the week as the US gets underway with the Thanksgiving holiday tomorrow.
The euro weakened after initially strengthening overnight due to the release of German import price data for October which showed a decline to 3.6, the largest monthly decline since 1962. October French consumer confidence, however, surprised the markets by actually rising to -43 from -47 boosted by the drop in oil prices. In other news, the European Union told fellow members that they should institute a fiscal stimulus as Europe continues to show signs of a deep recession.
The British pound weakened against its US counterpart as its three day run finally came to a close. The anticipated Q3 GDP estimate of a 0.5 percent decline was cemented as consumer spending figures released and fell by the most in 13 years.
The Japanese yen strengthened overnight as Bank of Japan governor Shirakawa continues to resist a call for lower rates below the current 0.3 percent level. Look for the market to be supportive of this view as USD/JPY continues to push higher.
The Canadian dollar fell close to1 percent against its US counterpart as lackluster equity markets weighed on investors. Also pressuring the commodity linked currency was a drop in oil prices to $50 a barrel.
The Australian and New Zealand dollars fell as commodity prices remained pressured and investors focused on a global recession. In other news the OECD stated yesterday that Australia's economic growth is likely to slow to 1.75 percent next year with unemployment continuing to rise over the next two years.
Look for the Aussie to remain under pressure as investors focus on the Reserve Bank of Australia cutting rates aggressively next month.
The Mexican peso strengthened against the dollar as market participants continued to digest the efforts to rescue Citigroup along with the US Federal Reserve’s announcement to buy mortgage-related debt and securities as a measure to support the financial system.
