WASHINGTON: The dollar eased lower Tuesday against other major currencies after four straight gains, as economists trimmed their outlook for the US economy due to unexpectedly dull data from September.
The US Commerce Department reported that new orders for manufactured goods fell $2.8 billion, or 0.6 percent, to $499.4 billion in September, and the trade deficit widened to $43.0 billion as exports slowed and imports remained flat from the previous month.
Analysts said last week's initial estimate of growth in the third quarter, which came in at a sprightly 3.5 percent, was likely overstated by as much as 0.4 percentage points, and that the current quarter would be slower, based on the new numbers.
"Both exports and imports through September were weaker than we expected, suggesting less growth of both in the fourth quarter," said Macroeconomic Advisors.
But euro trade was also affected by market talk of battles within the European Central Bank over policy, two days before the ECB meets to review its stimulus program, according to Christopher Vecchio of DailyFX.
"Reports have surfaced that ECB President Mario Draghi faces a small-scale mutiny, with many national central banks feeling that they've been left out of the loop for determining monetary policy," he said.
That has repressed recent talk of an expanded ECB quantitative easing program and forced some traders to find cover, giving the single currency a bit of support, he said.
"We must not discount the potential of a euro short-covering rally around the ECB rate decision on Thursday" and extending through the US monthly jobs market report on Friday, he said.
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