The US dollar weakened vs. most major currencies as the stock market rose.
Bad economic data also helped weaken the dollar as continued jobless benefits reached a record high in early February. The number of people on the benefits rolls surged 170,000 to 4.99 million in the week ended February 7. The Philly Fed factory index was reported at -41.3 in February, worse than expected -25.0.
The producer price index rose 0.8% in January, which is the first time since July.
The euro strengthened against the dollar with gains in Eastern European currencies and growing optimism that Germany will support these countries.
Economic data continued to be weak as German business expectations hit their lowest level in at least 32 years.
The yen continued to weaken against the dollar as investors are worried about the Japanese economy. The Japanese economy shrank 3.3% in the last quarter, which is its deepest contraction in more than three decades. The Bank of Japan left its interest rates unchanged at 0.1%
The British pound rose against the dollar on hopes that a US housing bailout plan will help boost the global economy. The Obama administration has pledged up to $275 billion to help stem home foreclosures.
Commodity currencies such as the Australian, New Zealand and Canadian dollar all were higher against the dollar as risk appetite recovered. Crude oil was up more than $2/barrel helping the loonie strengthen. Most commodities were stronger today helping these currencies.
