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Dollar Shows Resilience in Face of Poor Reports

March 5, 2014 at 17:44 by Vladimir Vyun

Benjamin Franklin's portrait on a hundred-dollar billToday, US macroeconomic data was disappointing yet again following the set of positive reports released on Monday. It did not affect the US dollar in a strong manner as the greenback fell against the Great Britain pound, but managed to keep gains versus the euro and the Japanese yen.

The employment estimate released by Automatic Data Processing showed growth by 139,000 in February, while investors hoped for growth by at least 159,000. Moreover, the January reading received a big downward revision. The non-manufacturing Purchasing Managers’ Index from Institute for Supply Management disappointed too, showing a drop from 54.0 percent in January to 51.6 percent in February, while specialist anticipated much smaller decrease.

The poor data raises concern that the Federal Reserve started stimulus reduction prematurely. Such view may be confirmed by non-farm payrolls (which will be released on Friday) in case they turn out to be much worse than the consensus forecast of 151,000.

EUR/USD was down from 1.3742 to 1.3732 as of 17:44 GMT today, while its intraday minimum was at 1.3706. USD/JPY ticked up from 102.20 to 102.36, reaching the high of 102.54 intraday. GBP/USD rose from 1.6663 to 1.6722.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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