Forex - Dollar Dives on Falling U.S. Factory Orders, Euro Strength

8 April 2019, 19: 54
© Reuters.

The U.S. dollar fell against its rivals Monday as a modest decline in U.S. factory orders did little to ease worries about a slowdown in the economy.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.37% to 94.64.

Factory goods orders fell 0.5%, in line with economists' expectations amid weak orders for machinery, transportation equipment and computers and electronic products, the Commerce Department said on Monday.

The decline in the greenback was also exacerbated by a firmer euro amid better-than-expected trade data from Germany.

EUR/USD rose 0.42% to $1.1265. The upbeat start to the week for the single currency comes just days ahead of European Central Bank meeting due Wednesday, with many expecting further dovish commentary from ECB President Mario Draghi.

GBP/USD rose 0.22% to $1.3065 as U.K. Prime Minister Theresa May continued talks with opposition leader Jeremy Corbyn to break the Brexit impasse.

May is set to meet with German Chancellor Angela Merkel and French President Emmanuel Macron on Tuesday, in a bid to secure an extension to Brexit with just four days until the April 12 deadline. The prime minister will reportedly also reach out to other leaders before pleading her case for another delay at Wednesday’s EU summit in Brussels. Without an extension, the U.K. risks leaving the EU without a deal.

An extension to Brexit "may depend whether the U.K. can pass the withdrawal agreement before Friday at 23:00 London time," said Societe Generale (PA:SOGN). Sterling "could face a white-knuckle ride week, with the mood swinging between hope and despair," the bank added.

USD/JPY fell 0.23% to Y111.49 as a rise in the yen on the back of safe haven amid a selloff on Wall Street.

USD/CAD fell 0.52% to C$1.3313 as rising oil prices helped the loonie shrugged off weaker-than-expected Canadian housing data.