U.S. Dollar Falls as Growth Slows

The dollar fell for a second day against a basket of currencies as government reports showed the U.S. economy remains sluggish, backing speculation the Federal Reserve will hold interest rates at historically low levels.

The pound strengthened against the euro to highest level since November 2012 as Bank of England Governor Mark Carney said the central bank may raise interest rates from a record low earlier than investors expect and expressed concern that mounting debt related to the housing market could undermine stability. New Zealand’s dollar surged the most in four months after the central bank raised interest rates and flagged further increases. The yen reached a four-month high versus the euro as the Bank of Japan started a policy meeting.

“Canadian dollar, Aussie have generally done a bit better and dollar is a bit under pressure,” said Sebastien Galy, a senior currency strategist at Societe Generale SA in New York, in a phone interview. “The environment is a bit risk-averse. The data was a bit weaker also in the U.S., as the retail data wasn’t very good.”

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.