US dollar weaker in light trade

Indications that US interest rates might peak at 5 percent and climbing crude oil prices combined for a weaker US dollar on Monday despite positive data on capital inflows.

The greenback dropped 1.5 percent to $1.2270 in relation to the euro and lost 0.7 percent to the Japanese yen, to ¥117.64. It was the dollar’s lowest level versus the yen in two weeks. The US currency declined 1.1 percent to $1.7709 against sterling and was down 1.8 percent to SFr1.2775 versus the Swiss franc.

New data showed that net inflows into the US in February were at $86.9 billion, much higher than the $62.6 billion that had been expected. The money coming in was more than enough to cover the months trade deficit of $65.7 billion. That was the good news.

Bad news for the dollar came in a Wall Street Journal article, which claimed that Federal Reserve officials were not inclined to raise interest rates after an expected hike in May to 5 percent. Worries over higher crude oil prices, exaggerated by the insistence of Iran that it will continue pursuing its nuclear ambitions, also hurt the greenback. Also causing concern was a new Empire State manufacturing survey from the New York Federal Reserve, which showed the index level at 15.81 in April. It was expected to be at 24.50. Additionally, the March survey was revised down to 29.03.


Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Comments are closed.