7/24/2008 3:15 PM: EUR/$..1.5648 $/JPY..107.37 GBP/$..1.9840 $/CHF..1.0377 AUD/$..0.9568 $/CAD..1.0129
Dollar Rallies by
Korman Tam The dollar continued to advance across the board, pushing the sterling to 1.9820 and the euro to 1.5629 in the New York session. Dismal economic reports from the Eurozone and UK dragged their respective currencies lower. While the data released in the US fared just as poorly, with existing home sales plunging to its lowest level in 10-years, much of the weakness in the economy has already been priced into the dollar and the recent pullback in oil has propped the currency higher.
US economic reports released today saw higher than expected weekly jobless claims, which jumped above the 400k level to 406k, outpacing estimates for an increase to 376k, up from 366k a week earlier. Existing home sales plunged to its lowest level in 10-years to 4.86 million units in June, missing estimates for a slight decline to 4.93 million units from 4.99 million units and down 2.6%.
The calendar for Friday includes June durable goods orders, July University of Michigan consumer sentiment, June new home sales, and building permits. Consensus estimates call for durable goods orders in June to decline by 0.3% versus a flat reading previously, while the ex-transportations orders are seen improving to -0.2% from -0.8%. The final reading for the July University of Michigan consumer sentiment survey is forecasted to remain unchanged at 56.4. Meanwhile, new home sales are seen falling to 500k units in June from 512k units a month earlier.
Sterling TumblesThe sterling quickly relinquished its recent gains, prompted by heightened expectations for policy tightening from the BoE following the recently released minutes, falling to 212.74 against the yen and 1.9815 versus the dollar. Dragging the pound lower today was a sharp plunge in retail sales, which tumbled to its lowest level in 22-years, reversing its 3.5% increase in May and posting a 3.9% decline. The slowdown in consumption was attributed to increasing food and energy prices, as well as rising unemployment in the UK.
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Sterling Tumbles
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