MW: Dollar losses gains vs euro, hurt by cloudy economic view
Pound advances; Aussie dollar tuns mixed after new PM steps in
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- The U.S. dollar gave up gains versus the euro on Thursday, after stocks headed south following a report on jobless claims and mildly better-than-expected data on U.S. durable goods orders.
The euro (CUR_EURUSD 1.2321, +0.0003, +0.0244%) fell to $1.2306 from $1.2312 in late New York trading on Wednesday.
The dollar index (DXY 85.74, +0.00, +0.00%) , which tracks the U.S. unit against six major counterparts, edged up to 85.791 from 85.82 late Wednesday.
Against the Japanese yen, the dollar (CUR_USDYEN) fell to ¥89.35 from ¥89.87.
The Commerce Department said orders for U.S.-made durable goods fell 1.1% in May, not as severe as the expected 1.4% drop. Excluding the drop in transportation orders, orders were up 0.9% in May, the third increase in the past four months. Read about durable-goods orders.
"Durable goods remain perfectly consistent with continued economic recovery and annualized growth in the 3-4% area during 2010 and 2011," said Michael Woolfolk, senior currency strategist at BNY Mellon.
Separately, the Labor Department said first-time jobless claims fell by 19,000 last week to a seasonally adjusted 457,000, the lowest in six weeks. See more on jobless claims.
Before the U.S. data, the dollar had been stronger as another round of hand-wringing about the global economy prompted investors to buy the dollar as a safe haven. Analysts said the cost to insure Greece's debt rose to a new record.
U.S. stock indexes opened in negative territory and extended losses in mid-morning trading. The S&P 500 Index (SPX 1,077, -15.25, -1.40%) was lately down by 0.8%.
"Relative to market expectations, the data is of mild support for risk trade," Alan Ruskin, head of currency strategy at RBS. "Do not be surprised to see this data get lost in the day to day risk chop."
The reports followed a pair of unexpectedly weak data on U.S. home sales. See more on homes sales.
The greenback turned notably lower against the euro in North American trading Wednesday, after a Federal Reserve policy statement showed the U.S. central bank less positive in its assessment of the nation's economic outlook. See Wednesday's Currencies report.
The British pound relinquished some of its earlier gains. The British currency has risen this week, helped by the new coalition government's announcement Tuesday of an emergency budget that it would cut spending and rein in the U.K. deficit.
The pound (CUR_GBPUSD 1.4965, +0.0013, +0.0869%) rose as high as $1.5011, the first time it's topped $1.50 on an intraday basis since May 12, and recently traded at $1.4977 compared with $1.495 late in the prior session.
On Wednesday, minutes from the Bank of England's latest interest-rate meeting showed one member wanted to raise rates and Moody's Investors Service said that the U.K. budget is supportive of the country's Aaa rating. Read about Moody's assessment of U.K. budget.
Aussie's short-lived rise
The Australian dollar dropped almost 1%, reversing lower after Julia Gillard, the new prime minister, raised hopes that a controversial mining-tax proposal will be modified. See more on Australia's Gillard.
Gillard called for a truce between the government and the mining industry regarding the planned levy, which would impose a 40% tax on miners' profits, beginning on July 1, 2012.
The Aussie (CUR_AUDUSD 0.8665, -0.0075, -0.8580%) bought 86.71 U.S. cents Thursday, down 0.9%, after having risen as high as 87.68 U.S. cents earlier.
