Falling iron-ore prices keep Aussie under pressure
By Deborah Levine and William L. Watts, MarketWatch
SAN FRANCISCO (MarketWatch) — The U.S. dollar fell further Thursday after the release of data on jobless claims and consumer spending.
Still, traders mostly awaited a speech scheduled for Friday by Federal Reserve Chairman Ben Bernanke.
The ICE dollar index DXY -0.12% , a measure of the U.S. unit against a basket of six major currencies, fell to 81.422 from 81.551 in North American trade late Wednesday.
The WSJ dollar index XX:BUXX -0.12% , which uses a slightly larger basket, slipped to 71.02 from 71.05.
The euro EURUSD +0.14% rose to $1.2553, from $1.2541 before the data and $1.2531 Wednesday.
The dollar lost more ground after the Labor Department said U.S. first-time jobless claims were unchanged at 374,000 last week, which was higher than some analysts expected.
Separate data showed consumer spending climbed in July.
Bernanke will deliver a speech at the Kansas City Federal Reserve Bank’s annual economic symposium in Jackson Hole, Wyo., on Friday. Strategists said expectations that Bernanke will use the occasion to signal a further round of monetary stimulus are fading.
The European Commission’s economic-sentiment indicator for the euro zone fell more than expected, to a nearly three-year low. But the euro was buoyed by a strongly received auction of Italian debt. Read: Borrowing costs drop at Italian bond auction.
The British pound GBPUSD +0.14% bought $1.5864, from $1.5834.
The dollar fetched 78.55 Japanese yen USDJPY -0.19% , down from ÂĄ78.68.
The Australian dollar AUDUSD -0.18% slipped to $1.0341, from $1.0356.
Market focus “remains on the Australian dollar, which had another difficult session overnight, as press coverage of the continuing decline in iron-ore prices turned increasingly pessimistic,” said Chris Walker, strategist at UBS. “Even a stronger-than-expected capital- expenditure report for [the second quarter] failed to offer any significant support.”
The price for spot iron ore, a key Australian export, has tumbled by 37% in just under six months to around $90.30 a ton.
The drop had accelerated in recent weeks, with analysts tying the drop to slower Chinese steel production and better Australian weather, which extended the iron-ore production period into the monsoon season. See The Tell blog: Iron-ore prices slammed again.
Deborah Levine is a MarketWatch reporter, based in New York.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt.
