Home Forex Dollar trades near session highs despite negative U.S. economic data

Dollar trades near session highs despite negative U.S. economic data

by Paul
Dollar traded

The U.S. dollar traded near session highs on Thursday despite a slew of negative U.S. economic reports

The U.S. dollar traded near session highs on Thursday, despite a slew of negative U.S. economic reports pointing to signs of slowing growth in the underlying economy.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.22% to 96.50, near session highs of 96.53.

A trio of negative reports across key sectors of the economy undershot economists’ forecasts, raising doubts about the strength of the U.S. economy.

The Commerce Department said core durable goods orders slowed to rate of 0.1% in December, missing economists’ forecasts for a 0.2% rise.

The National Association of Realtors said existing home sales fell 1.2% in January from the prior month to a seasonally adjusted annual rate of 4.94 million units. Economists were expecting a 0.8% increase to 5.01 million homes.

The dour round of data comes just a day after the minutes of the Federal Reserve’s January meeting signaled central bank policymakers were preparing to stop shrinking their balance sheet later this year and saw no risk to keeping rates higher for longer.

The greenback, however, since the release of the minutes, has defied expectations that it would soon run out of steam.

TD Securities said on Wednesday that the mostly dovish signal on the balance sheet should keep the USD on the back foot. It lends further support to global reach-for-yield and should also reinforce topside resistance in the dollar index.

The euro and pound were modestly lower amid a lack of progress on Brexit talks just weeks ahead of the March 29 deadline when the U.K. is set to leave the EU.

Following talks with U.K. Prime Minister Theresa May, European Commission President Jean Claude Juncker said on Thursday that the worst can be avoided but he was not very optimistic over the issue.

GBP/USD fell 0.12% to $1.3034 and EUR/USD fell 0.05% to $1.1329.

USD/JPY fell 0.08% to Y110.7 as demand for safe-haven yen increased after Wall Street dropped deeper into the red.

USD/CAD gained 0.29% to C$1.3212 as the Canadian dollar came under pressure following a fall in oil prices amid data showing a larger-than-expected build in U.S. crude inventories.

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