Dollar falls after poor Consumer and Trade Data

Monday, November 16, 2009

A spate of negative data on consumer confidence and trade gaps took the thunder out of a two day Dollar rally on Friday and brought the bears back to the US currency in a broad day of losses. A Reuter’s survey of consumers showed that the consumer confidence index dropped to a three month low of 66, a 5 percent from analyst expectations of 71. The November number is also a 4.6 percent drop from the October data. The data is especially hard to swallow now, during the start of the peak holiday spending season and bodes poorly for retail sales in the coming months.

At the same time, data from the September trade deficit showed the trade gap widened by 18.2 percent, the largest margin in over 10 years. The US Department of Commerce announced that the monthly trade gap ballooned to 36.5 Billion Dollars, up from a 30.8 Billion Dollar showing in August, analysts were expecting a small increase, to 31.6 Billion. The data showed that part of the issue is that the fall of the Dollar’s value is being offset by strong demand for US products while the costs have gone up on core commodities such as oil.

The average price for imports rose by .7 percent a .5 percent gain from the last report of a .2 percent increase in September, a number that analysts say is rising too fast and may spell trouble for the trade gap should this trend continue.

At the close, the US Dollar was down .38% against the Euro to 1.4901, down .8% versus the Japanese Yen to 89.63, down .59% to the British Pound Sterling to 1.6676, down .38% against the Canadian Dollar to 1.0514, down 1.02% to the Australian Dollar to .9328, down 1.43% versus the New Zealand Dollar to .7433 and down .47% to the Swiss Franc to 1.0124.


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