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NEW YORK: The US dollar hit new eight-month highs against the euro on Friday after stronger-than-expected data on US durable goods orders boosted the greenback, while weak German business sentiment heightened concerns about the euro zone.
The Commerce Department said Friday that orders for long-lasting US manufactured goods rose 0.7 percent in June, beating economists' expectations for a 0.5 percent rise. The data pointed to momentum in the US economy and underpinned the dollar, which had earlier gained on a drop in Germany's Ifo survey of business sentiment.
"US data has been good or better than expected, whereas European data continues to point to a slowdown," said Boris Schlossberg, managing director in FX strategy at BK Asset Management in New York.
Germany's Ifo survey of business sentiment based on a monthly survey of some 7,000 firms fell to 108.0 in July, marking its third consecutive monthly decline and missing estimates of 109.4, according to a Reuters poll of economists.
The euro hit a new eight-month low against the dollar of $1.3427 in the wake of the US durable goods orders data, which came on the heels of more positive US jobless data Thursday.
The euro fell against the dollar partly on geopolitical tensions between Russia and Ukraine, which could hurt European growth given trade between Russia and Germany, analysts said.
European Union ambassadors reached preliminary agreement on Friday to push ahead with hard-hitting sanctions against Russia but details have yet to be worked out, diplomats said.
"There's some perception that if geopolitical tensions escalate, the euro zone economy would be the most potentially vulnerable economy in the G10, and that hurts the euro," said Vassili Serebriakov, currency strategist at BNP Paribas in New York.
The euro was last down 0.2 percent against the dollar to trade at $1.34365.
The dollar was flat against the Japanese yen at 101.8 yen, and was up 0.19 percent against the Swiss franc to trade at 0.90435 franc after hitting a fresh five-month high of 0.90485.
The US dollar index, which measures the dollar against a basket of six major currencies, was last up 0.14 percent at 80.982. While the US and European data helped lift the dollar, a drop in US government bond yields limited the dollar's gain.
Benchmark 10-year US Treasury notes were last up 8/32 in price to yield 2.478 percent, with fixed-income traders disappointed by soft spots in the US durable goods data including weaknesses in airlines and other sectors.
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