The US Dollar has come under pressure following the release of data that hints that recovery in the world’s largest economy is under threat.
Poor manufacturing data posted in the New York Empire State Index saw the Euro make a brief gain against the Dollar.
The survey, which assesses business conditions and expectations of manufacturing executives in New York, posted a fall of six points. Despite the decline the index remained in the black for the third consecutive month in a row. Indexes for the six-month outlook pointed to a moderate degree of optimism about future conditions.
The release of the Treasury International Capital or TIC statement showed that in February foreign investors dumped US assets due to the imposition of sequestration budget cuts that came into force in March. The figure fell from $25.7 billion to -$17.8 billion. Economists had been predicting a rise to $40 billion. A negative or declining Tics’ figure reflects a declining capital flows picture.
Elsewhere confidence among US homebuilders took an unexpected tumble in April marking its third straight decline. The National Association of Home Builders/Wells Fargo index of builder confidence dropped to 42, the lowest since October, from 44 in March, the Washington-based group said today. Economists projected an index of 45.
The data suggests that traders can expect the US economy to show further signs of a slowdown as the budget cuts begin to make their presence felt. The US Dollar meanwhile has had a day of gains after China released weaker-than-expected GDP data. The ‘Greenback’ made gains against the majority of its peers as a result.
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