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Slower US Economy’s Growth Makes Dollar Weaker

April 21, 2011 at 23:50 by Vladimir Vyun

US DollarThe US dollar declined today as the macroeconomic reports showed that the economy of the US improved with slower pace than was anticipated.

The Manufacturing Index of the Philadelphia Fed tumbled from 43.4 in March to 18.5 in April, while it was expected to go down to only 37.1. The index shows that the manufacturing still expands, but much slower. The unemployment claims decreased from 416,000 to 403,000 last week, while forecasts promised more optimistic value of 394,000.

There was some positive data too. The leading indicators rose 0.4 percent in March, following the 1.0 percent growth in February. Analysts expected an increase by 0.3 percent. Nevertheless, the unexpected slowdown of the manufacturing growth is a very troubling sign as this sector was of the strongest in the US economy.

EUR/USD was at 1.4556 as of 23:50 GMT today after it jumped from 1.4521 to 1.4647 earlier. GBP/USD went up from 1.6407 to 1.6519, while USD/JPY dropped from 82.55 to 81.90.

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