NEW YORK: The euro rose against the dollar on Wednesday (Mar 25) following reports showing improved German business confidence and a drop in US durable goods orders.
The shared European currency also rose against the yen, while the dollar fell against the Japanese currency.
The closely watched Ifo economic institute index on business confidence in Germany, Europe’s biggest economy, rose to 107.9 in March, the highest level since July 2014. The report came on the heels of a Markit report on Tuesday that showed eurozone business activity near a four-year high in March.
Meanwhile, Commerce Department data showing US durable goods orders fell 1.4 per cent in February “gave investors another reason to stay out of dollars,” said Kathy Lien, managing director of BK Asset Management.
The greenback generally has retreated since the Federal Reserve one week gave a cautious outlook on the timetable for raising interest rates.
At a Mar 18 news conference, Fed Chair Janet Yellen also expressed concern that a strong dollar would depress US exports. “The Fed’s words of caution on the dollar, coupled with its lower outlook for growth and inflation, all but removed from the table the chance of a rate increase as early as June,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.
“The dollar’s prospects going forward should be squarely in the hands of the economy with markets eyeing next week’s employment report for clarity on when US borrowing rates might rise.”