Alexa

Dollar falls on upbeat US economic reports

Dollar falls on upbeat US economic reports

The dollar fell against other currencies Monday as upbeat economic data drove investors into riskier assets.
The dollar has been viewed as a safe haven during the global recession, but it is not a very lucrative currency to invest in, with U.S. interest rates close to zero. So as economic reports come in more positive, many investors, in hopes of a rebound, are moving money into euros and other currencies that yield higher returns.
The Commerce Department on Monday said U.S. construction spending made a surprise 0.3 percent rebound in March, after five straight months of declines. Economists had predicted another decline.
The National Association of Realtors' index of pending home sales, meanwhile, rose by 3.2 percent in March. That was more than expected, and the second straight monthly gain.
The 16-nation euro rose to $1.3396 in late New York trading from $1.3267 Friday, while the British pound rose to $1.4994 from $1.4916. The dollar fell to 98.90 Japanese yen from 99.35 yen.
In other late trading, the dollar slid to 1.1747 Canadian dollars from 1.1840, and dipped to 1.1263 Swiss francs from 1.1356.
Two key reports due later this week, however, could send investors back into the dollar if they come in worse than anticipated.
One is the government's stress test of the 19 largest U.S. banks. Most investors are expecting the results to be a non-event, because the market has already priced in the possibility of big banks needing to raise additional capital. But if the results are harsher than Wall Street is expecting, it could send market participants back into safe assets.
Another important piece of data is the Labor Department's April employment report. Economists predict that the report will show that the unemployment rate rose to 8.9 in April and that 620,000 U.S. jobs were lost.


Updated : 2021-04-16 10:48 GMT+08:00