Dollar Extending Recent Weakness As The Week Draws To A Close

14:19, 24th April 2015

(RTTNews) - The dollar is adding to its recent weakness against is major competitors at the end of the trading week. Many investors are now shifting their focus to next week. The Federal Reserve will conclude its 2-day policy meeting next week Wednesday and the Bank of Japan will wrap up its policy meeting next week Thursday. After another round of disappointing U.S. economic data at the end of the current week, investors believe the Fed is unlikely to begin raising rates in the near future.

New orders for U.S. manufactured durable goods increased by much more than expected in the month of March, according to a report released by the Commerce Department on Friday, although the jump was primarily due to strength in the volatile transportation sector.

The report said durable goods orders surged up by 4.0 percent in March after slumping by 1.4 percent in February. Economists had expected orders to edge up by just 0.5 percent.

However, excluding the increase in orders for transportation equipment, durable goods orders actually fell by 0.2 percent in March compared to a 1.3 percent decrease in the previous month. The modest decrease came as a surprise to economists, who had expected ex-transportation orders to rise by 0.3 percent.

The unexpected drop in ex-transportation orders reflected notable decreases in orders for machinery and electrical equipment, appliances, and components. The Commerce Department also said orders for non-defense capital goods excluding aircraft, a closely watched indicator of capital spending, fell by 0.5 percent in March after tumbling by 2.2 percent in February.

Meanwhile, the meeting of Eurozone finance ministers in Latvia concluded without an agreement on Greece. Discussions will continue at the next Eurogroup meeting on May 11.

German Chancellor Angela Merkel stated that she had a "constructive" meeting with Greek Prime Minister Alexis Tsipras.

Eurogroup Chairman Jeroen Dijsselbloem said Friday there were still wide differences to cover and to bridge with Greek authorities and funds will not be disbursed without a comprehensive deal.

"Time is running out," he told at the press conference following the meeting. Too much time has been lost in the past two months.

"It is therefore clear that these discussions need to make significantly more progress, so that the institutions can give their green light on the comprehensive package which will then go to the Eurogroup for the political decision."

Greek banks can avail emergency liquidity as long as they remain solvent, European Central Bank President Mario Draghi said Friday.

However, Draghi pointed out that higher yields caused by the lingering uncertainty were eroding the value of the collateral banks offer in return for loans.

The dollar dropped below a 1-week trading range between $1.07 and $1.08 against the Euro Friday and set a 2 1/2 week low of $1.09. The U.S. currency has since risen back to around $1.0855 this afternoon.

German business confidence strengthened for the sixth straight month to a 10-month high in April reflecting the continuing upswing in the economy, but firms turned less optimistic about the business outlook.

The business confidence index rose more-than-expected to 108.6 in April from 107.9 in March, the results of a survey by Munich-based Ifo Institute showed Friday. This was the highest score since June 2014, when it stood at 109.4. The indicator was forecast to rise moderately to 108.4 in April.

The total value of orders received by the German construction industry increased in February from a year ago, figures from Destatis showed Friday. Orders in the construction sector climbed a price-adjusted 0.7 percent year-over-year in February.

A measure of France's future economic activity rose for a second straight month in February, signaling a continuation of recovery in coming months, survey results from the Conference Board showed Friday. The Conference Board Leading Index for France climbed 0.2 percent to 111 from 110.8 January, when it rose 0.3 percent. In the August to February period, the index increased 1.3 percent.

The buck extended its losing streak against the pound sterling to 2 weeks Friday and sank to $1.5185, its lowest level since early March. The dollar was trading around the $1.46 level before the slide began 2 weeks ago.

British households perceive that the value of their home increased in April, a survey from Knight Frank and Markit Economic showed Friday. The house price sentiment index, or HPSI, rose to 58.2 in March from 57.5 in the previous month. This marked the twenty-fifth consecutive month of the index remaining above 50.

The greenback extended yesterday's losses against the Japanese Yen Friday, falling to Y118.925, from Thursday's high of Y120.087.

An index measuring producer prices in Japan were up 3.2 percent on year in March, the Bank of Japan said on Friday, standing at 103.0. That was just shy of forecasts for 3.3 percent, which would have been unchanged from the February reading.

Japan's all industry activity increased unexpectedly in February, figures from the Ministry of Economy, Trade and Industry showed Friday. The all industry activity index climbed 0.1 percent month-on-month in February, in contrast to economists' expectations for a 1.0 percent decline.