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US dollar weakens as investors weigh global data

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US dollar weakens as investors weigh global data

The US dollar fell against a basket of its major competitors in the mid-week session as European data bolstered support for the euro and pound safe havens. The US dollar has fluctuated over the past five days after a swift selloff triggered by the FOMC cost the greenback more than 1 percent. Market participants keeping tabs on the ongoing Fed situation know exactly what’s at stake: the US central bank’s failure to trim the $85 billion in monthly asset purchases has bolstered risk sentiment at the expense of the US dollar safe haven.

The US dollar Index fell more than 0.3 percent to 80.29 in the North American session as market participants reacted to fresh batches of data from Europe. Boosting sentiment toward the UK was the monthly CBI Distributive Trades report from the Confederation of British Industry. The September reading was 10 points higher than expectations, suggesting an optimistic near-term outlook for the Kingdom’s retail and wholesale distribution sector. The report sent the GBPUSD soaring to 1.6078, a gain of half a percent.

The euro enjoyed a strong bid after the Gfk released its monthly Consumer Confidence Survey. The report showed Germany’s consumer climate is stabilizing at the start of autumn, led by more favourable sentiment toward economic expectations and willingness to buy. The EURUSD advanced more than 0.4 percent to 1.3526.

Data releases from the US were relatively in-line, with durable goods orders advancing 0.1 percent in August. Although durables goods orders were higher than expectations for zero growth, the figure was propelled largely by activity in the transportation sector. In a separate report the Census Bureau announced the sale of 421,000 new residential homes in August, beating July sales by more than 30,000.

The data wire will remain active Thursday when the US releases another batch of GDP figures, as well as weekly jobless claims and pending August home sales.

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