The US dollar extended its early decline against the pound on Tuesday, after nation’s trade deficit widened more-than-forecast in September, due to a notable decrease in the value of exports.
The Commerce Department released a report showing that trade deficit widened to USD43.0 billion in September from a revised USD40.0 billion in August. Economists had expected the deficit to tick up to USD40.2 billion from the USD40.1 billion originally reported for the previous month.
The factory orders for the month of September are due at 10:00 am ET . The factory orders are expected to fall 0.6%, after tumbling 10.1% in August.
Traders await ADP private sector payrolls report and jobs data for October and weekly jobless claims due this week for further clues about US economy.
Reversing from an early high of 1.5964 against the pound, the greenback dropped to 1.6014. The next possible downside target for the greenback is seen around the 1.61 zone.
UK construction sector growth slowed more than expected in October, results of a survey by Markit Economics and the Chartered Institute of Purchasing and Logistics showed.
The seasonally adjusted Markit /CIPS construction purchasing managers’ index, or PMI, fell to 61.4 in October from 64.2 in September. This was less than the 63.5 expected by economists.
The greenback remained lower against the euro, after sliding to a 4-day low of 1.2530 in the Asian session. If the dollar extends its downtrend, 1.26 is possibly seen as its next support level.
European Commission slashed the growth and inflation forecasts for the euro area, citing the weak economy and slow improvement in the employment situation.