BS: Dollar Falls as Signs of Growth Damp Demand for Haven Assets
By John Detrixhe
Dec. 23 (Bloomberg) -- The dollar fell against the yen as U.S. durable goods orders rose more than forecast, adding to evidence of economic growth and damping demand for a refuge.
The euro fell against the yen as European Central Bank Executive Board member Lorenzo Bini Smaghi said policy makers shouldn’t shirk from using quantitative easing if it’s needed to avoid deflation. The dollar weakened after a Wall Street Journal report that the Federal Reserve may keep its target rate for overnight lending between banks unchanged through 2014 or even longer.
The markets have “a slightly bullish tone overall,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia in Toronto. “The shift in language would be significant and certainly imply loose monetary policy for a very long time.”
The U.S. currency depreciated 0.1 percent to 78.08 yen at 9:36 a.m. New York time. The greenback was l,ittle changed against the euro at $1.3040 and was headed for its first weekly decline since Dec. 2. The euro dropped 0.2 percent to 101.82 yen.
The Standard & Poor’s 500 Index rose 0.3 percent. U.S. 10- year notes fell, pushing the yield up five basis points, or 0.05 percentage point, to 2 percent.
U.S. bookings for equipment meant to last at least three years rose 3.8 percent after no change in prior month that was previously reported as a decline, data from the Commerce Department showed today in Washington. Demand for business equipment excluding military hardware and aircraft dropped 1.2 percent in November, the biggest decline since January.
Consumer spending rose less than forecast in November as wages declined for the first time in three months, signaling the biggest part of the U.S. economy may struggle to pick up.
Purchases rose 0.1 percent for a second month, Commerce Department figures showed today in Washington. Incomes also grew 0.1 percent, the weakest in three months, after a 0.4 percent rise in October. The median estimate for spending in a Bloomberg News survey of economists called for a 0.3 percent advance.
--Editors: Paul Cox, Kenneth Pringle
To contact the reporter on this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
