The Euro climbed to its highest level in six-weeks on Tuesday as a report showed that manufacturing output in New York State fell more than forecast this month, the data increased investor concerns that the US economic recovery is stalling.
According to the Federal Reserve Bank of New York its general economic index declined to 4.48 this month, down from the 12.5 recorded in January. The sharp decline was also well below economist expectations for a decrease to 8.5.
Tuesday’s data is just one of a string of recent reports which have come in below market expectations suggesting that the world’s largest economy is seeing something of a slowdown, increasing investor speculation that the Federal Reserve may choose to slow the pace of its reductions to its bond buying programme.
Against the Pound the ‘Greenback’ edged away from the session highs it reached after data showed that inflation in the UK fell below the Bank of England’s target for the first time since November 2009. The Office for National Statistics said consumer price inflation accelerated at a rate of 1.9% last month, down from 2.0% in December. Analysts had expected consumer price inflation to remain unchanged last month.
The single currency meanwhile shrugged off reports which showed that economic sentiment in Germany and the wider Eurozone declined more than expected this month. According to the ZEW index, sentiment in Germany fell to 55.7, down from the 61.7 seen in the previous month.
The US Dollar could fall further on Wednesday if PPI and house data comes in below expectations. Another batch of disappointing data results is likely to increase concerns over the state of the US economy.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5985 ,
US Dollar,,Euro,0.7266 ,
US Dollar,,Canadian Dollar,1.0960 ,
US Dollar,,Australian Dollar,1.1063 ,
Euro,,US Dollar,1.3759 ,
Pound Sterling,,US Dollar,1.6706 ,
[/table]
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