US Dollar Plunges To New Low Against Euro...

Source: Daily FX

Fundamental data for the US economy pressed on the struggling dollar and led the Euro to hit an intraday high of 1.6018. The US dollar slid against all of the major currencies except for the Canadian dollar, and took the biggest loss against the British Pound as the pair retraced back to 1.99. The low yielding Swiss franc and Yen advanced against the US dollar as the pairs fell to 1.00 and 102.9, respectively, with the higher yielding Australian and New Zealand dollar following as oil prices hit a record high of $119.90 a barrel.

Current economic conditions continues to hamper growth prospects as additional downside growth risks surfaced from the housing market, with manufacturing activity taking a dip due to the weakness in the labor market. The Existing Home Sales index declined 2.0 percent from the month prior as banks continue to tighten lending practices, while the House Price index posting an unexpected gain as it rose to 0.6 percent from minus 1.1 percent. The Richmond Fed Manufacturing index also added to growth concerns as cost-cutting practices led to a fall in manufacturing employment, and lowered the index to 0.0 from 6.0.

Bearish sentiment took hold of the stock markets as DuPont and Texas Instruments lowered their second quarter earnings forecast, and dragged down Yahoo and Apple shares ahead of their first quarter earnings report. As a result, the DJIA dropped 104.79 points to 12,720.23 points, with 23 of the 30 components posting a decline. The broader S&P500 fell12.23 points to 1,375.94 points, with 228 stocks falling to a new 52 week low.

Mounting short-term downside risks moved risk adverse investors into the safe have of risk free bonds, and increased the demands for long-term bonds. As a result, the benchmark 10-Year yield fell to 3.695 percent from 3.720 percent, while the 2-Year yield surged to 2.193 percent from 2.172 percent.

Looking ahead, the Bank of England Minutes will kick off the eventful day at 8:30 GMT, with our focus turning to the Reserve Bank of New Zealand's rate decision at 21:00 GMT. The MBA Mortgage Applications index will be the only US data expected for tomorrow, and will be followed by the Canadian Retail Sales index at 12:30 GMT.