NEWS / Foreign Exchange

The greenback is weaker versus most major currencies this morning

The greenback is weaker versus most major currencies this morning than it was yesterday at this time. Part of the dollar's slide stems from U.S. economic data yesterday that were generally weaker than most market participants had expected. The Case-Shiller index showed that national house prices were down about 1% in February relative to the same month last year, and existing home sales fell more than expected in March. The Conference Board's index of consumer confidence also fell a bit more than expected in April. The dollar's woes were compounded this morning by stronger than expected data in Europe. Real GDP in the United Kingdom rose 0.7% (not annualized) relative to the previous quarter. The market consensus forecast had anticipated a 0.6% increase. The Ifo index of German business sentiment rose more than expected in April, leaving the pan-German index near the all-time high it set in December. Speaking of all-time highs, the euro is within a whisker of its all-time high versus the dollar.

Whether or not the euro breaks through this important resistance level may depend in part on today's calendar. Data on durable goods orders in March print this morning at 8:30 EDT. The series, which is a good leading indicator of capital spending, has been disappointingly weak the past two months. The consensus forecast anticipates that orders rose 2.5% in March. A weaker-than-expected number could raise concerns about the outlook for capex, which likely would weigh on the dollar. Strong data, however, could give the greenback some respite, at least in the near term. Data on new home sales in March also will print this morning.