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US dollar slips vs euro after US durable goods orders dive

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The US dollar fell against the euro Thursday as the US government reported a slump in US durable goods orders, further evidence of a slowing economy.

[NEW YORK] The US dollar fell against the euro Thursday as the US government reported a slump in US durable goods orders, further evidence of a slowing economy.

The Commerce Department's report of a steep 5.1 per cent drop in new orders for manufactured goods in December was far worse than analysts expected and underlined the weakness in the US manufacturing sector.

It came a day after the Federal Reserve left the door open to a March interest rate increase, saying the decision would be data-dependent.

"The trade-weighted dollar slipped to one-week lows after a disastrous set of factory figures" that pushed higher the bar for the next Fed rate hike, said Joe Manimbo of Western Union Business Solutions.

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The dollar traded 0.4 per cent lower at US$1.0941 per euro around 2200 GMT from the same time on Wednesday.

"The Fed says it will watch and weigh all incoming data to determine when the next rate hike will occur. Today's numbers don't argue for anything happening right away," said Joel Naroff of Naroff Economic Advisors.

Mr Naroff said the government's first estimate of fourth-quarter economic growth, scheduled Friday, was "likely to disappoint." The yen was under pressure as the Bank of Japan opened a two-day monetary policy that some analysts thought could yield more stimulus for the ailing economy.

The dollar rose to 118.82 yen and the euro advanced to 130.00 yen.

AFP

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