FOREX-Dollar slips after weak US data supports dovish Fed view

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FOREX-Dollar slips after weak U.S. data supports dovish Fed viewReuters – UK Focus – Thu, Apr 16, 2015 16:06 BST

Companies:

RELATED QUOTESSymbolPriceChange000925.SZ24.10+0.15

(Corrects level of dollar index in final paragraph)

* Weak U.S. housing starts, rise in jobless claims hurt
dollar

* Traders push out expectations for Fed rate hike

* Dollar pares losses after Philly Fed data, comments from
Fed’s Fischer

By Sam Forgione

NEW YORK, April 16 (Reuters) – The U.S. dollar hit its
lowest level against the euro in a week on Thursday after
traders concluded that recent weakness in U.S. economic data
could delay the first Federal Reserve rate hike.

U.S. housing starts rose far less than expected in March and
permits recorded their biggest drop since last May, while a
separate report showed a surprise rise in the number of people
seeking unemployment aid last week.

Traders interpreted the data as another sign that the U.S.
economy struggled to bounce back in March, reducing the
likelihood of a Fed rate hike by June. A Fed hike is expected to
boost the dollar by driving investment flows into the United (Shenzhen: 000925.SZ – news)
States.

« This is more dollar weakness, driven by the market coming
around to the fact that these economic releases are weaker, »
said Richard Scalone, co-head of foreign exchange at TJM
Brokerage in Chicago. « Everything across the board screams for
the Fed to be patient. »

The dollar pared its losses, however, after data showed
factory activity in the U.S. mid-Atlantic region accelerated in
April and Fed Vice Chair Stanley Fischer told cable television
network CNBC that he hoped the market would take into account
that the Fed is likely to raise rates.

The dollar index, which measures the greenback against a
basket of six major currencies, was still on track for its third
straight session of losses.

Analysts said that concerns over the standoff between Greece
and its creditors limited the euro’s gains against the
greenback. The Financial Times reported that the International
Monetary Fund rebuffed an informal request by Greek officials to
delay loan repayments.

The Australian dollar was last up 1.24 percent against the
dollar at $0.7777, hovering at a nearly three-week high hit
earlier in the session, after data showed employment sped past
expectations in March while jobs created in February were
revised up sharply.

« It’s hard to be as pessimistic when you’ve had such a
strong number, » said Steven Englander, global head of G10
foreign exchange strategy at CitiFX in New York.

The euro was last up 0.16 percent against the dollar at
$1.06990 after hitting a one-week high of $1.07695.
The dollar was mostly flat against the Swiss franc at 0.96405
franc. The dollar was last up 0.12 percent against the
yen at 119.265 yen.

The dollar index was last down 0.22 percent at
98.114.

(Reporting by Sam Forgione; Additional reporting by Patrick
Graham in London; Editing by Nick Zieminski)

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