The dollar hit a one-week low against the euro on Thursday as a plunge in US durable goods orders supported the view of a US economic slowdown on softer global demand. The much weaker-than-expected reading in durable goods orders, which plunged 5.1 percent last month, raised the prospects of a lower US gross domestic product number on Friday.
A possible fall in US GDP combined with global equity market volatility and slumping oil prices that have plagued investors so far in 2016 would greatly reduce the likelihood that the Federal Reserve would raise interest rates aggressively this year. Economists polled by Reuters had anticipated only a 0.6 percent drop in durable goods.
"This is a terrible number, in my opinion," said Fabian Eliasson, vice president for currency sales at Mizuho Corporate Bank in New York. "Couple that in with retail sales over the holiday - they didn't knock it out of the park - and it's quite possible that the Q4 GDP is going to disappoint." The euro touched its highest since January 20 against the dollar. It was last up 0.45 percent at $1.0940. The Australian dollar set a three-week high against the US dollar. It was last up 0.9 percent at US $0.7090. The US dollar fell against the Canadian dollar, dropping below C$1.40 for the first time in three weeks. It was last down 0.2 percent at C$1.4076. The kiwi rose more than 1 percent against the dollar, and was last up 0.6 percent to $0.6469.
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