U.S. Dollar Extends Decline Despite Positive U.S. Data
24 November 2015 - 9:05PM
RTTF2
The U.S. dollar extended its early slide against most major
rivals in early New York deals on Tuesday, despite the releases of
positive data on U.S. third quarter GDP and home price index in
September.
Data from the Commerce Department showed that economic activity
in the U.S. increased by more than previously estimated in the
third quarter, primarily reflecting an upward revision to private
inventory investment.
The report said real gross domestic product climbed by 2.1
percent in the third quarter compared to the previously reported
1.5 percent increase. The upward revision matched economist
estimates.
Home prices in major U.S. metropolitan areas rose by more than
expected in the month of September, according to a report released
by Standard & Poor's.
The report said the S&P/Case-Shiller 20-City Composite Home
Price Index increased by a seasonally adjusted 0.6 percent in
September after inching up by 0.1 percent in August. Economists had
expected the index to rise by 0.3 percent.
U.S. stocks opened lower amid geopolitical concerns after
Turkish fighter jets shot down a Russian warplane near the Syrian
border.
The Russian-made SU-24 was reportedly shot down after receiving
repeated warnings about entering Turkish air space, although Russia
claims the jet remained in Syria for the duration of its
flight.
Investors await U.S. consumer confidence index for November, due
at 10:00 am ET.
The greenback showed mixed performance in the European session,
after being lower in Asia. While the greenback declined against the
yen and the euro in European trades, it rose against the pound and
the franc.
In early New York trades, the greenback that ended yesterday's
trading at 1.0180 against the franc slipped to a 4-day low of
1.0157. The next possible support for the greenback is seen around
the 1.00 level.
The greenback fell to a weekly low of 122.36 against the yen,
compared to 122.84 hit late New York Monday. The greenback is
likely to find support around the 121.00 mark.
The latest flash survey from Markit Economics showed that
Japan's manufacturing activity expanded at the fastest pace in
twenty months in November, as output growth quickened.
The Markit/ Nikkei Manufacturing Purchasing Managers' Index, or
PMI, rose to 52.8 in November from 52.4 in October. A score above
50 indicates expansion in the sector.
Extended early fall, the greenback weakened to a 4-day low of
1.0673 against the euro. The pair was worth 1.0636 when it ended
Monday's trading. On the downside, 1.08 is possibly seen as the
next support level for the greenback.
Results of a survey by the Ifo Institute showed that German
business confidence strengthened unexpectedly in November.
The business climate index rose to 109 in November from 108.2 in
October. It was expected to remain unchanged at 108.2.
Reversing from an early high of 0.7185 against the aussie, the
greenback eased back to 0.7229. Further weakness may take the
greenback to a support around the 0.73 region.
On the flip side, the greenback climbed to a new 2-week high of
1.5066 against the Sterling, as the latter declined after the BoE
chief Mark Carney's Parliamentary testimony. The pound-greenback
pair finished Monday's trading at 1.5123. The greenback may locate
resistance around the 1.50 level.
U.K. interest rates are likely to remain low for some time, Bank
of England Governor Mark Carney said at the Treasury Committee
hearing.
"One of the concerns in a low prolonged interest rate
environment, which we clearly are in, and are likely to remain for
some time, even with limited and gradual rate increases - it still
will be a relatively low interest rate environment," Carney
said.
The U.S. Richmond Fed manufacturing index for November and U.S.
consumer confidence index for November are set to be announced
shortly.
At 3:30 pm ET, Bank of Canada Deputy Governor Lynn Patterson
will give a presentation as part of the bank's regional outreach
program at the University of Regina in Canada.
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