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U.S. Dollar Steady After Disappointing Data

2019-2-22 10:33:07Market Analysis
U.S. Dollar Steady After Disappointing Data

The greenback recovered from its sudden fall after disappointing economic data on Thursday raised concerns about the strength of the U.S. economy and supported the Federal Reserve’s decision to hold rates steady for the foreseeable future.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell to 96.239 after the data before recovering to 96.391 as of 10:30 AM ET (15:30 GMT).

New orders for durable goods, excluding volatile items, fell unexpectedly in December, while business activity in the mid-Atlantic region declined to its weakest level since May 2016, according to the Philadelphia Fed's monthly survey.

The data supports the Fed’s decision to be patient with regards to interest rate hikes as it weighs growth headwinds, minutes released on Wednesday showed.

Meanwhile, traders were also waiting for developments on U.S.-China trade, with the two countries reported to have outlined commitments in areas such as intellectual property rights, services, currency and agriculture barriers to trade.

The dollar was down against the safe-haven yen, with USD/JPY falling 0.17% to 110.65. The yen is typically sought by investors as a safe haven during times of economic or market stress.

Elsewhere, the euro pulled back from earlier highs, with EUR/USD up 0.08% to 1.1344 after the European Central Bank said that near-term growth is likely to be weaker than expected, according to minutes released from its January meeting.

The pound was flat, with GBP/USD at 1.3048.

In Australia, the AUD/USD slumped 1% to 0.7086 after Westpac bank predicted that the Reserve Bank of Australia would cut rates twice in 2019, while NZD/USD fell 0.6% to 

0.6809.