US Dollar Plunges to New Low Against Euro as Housing Sector Continues to Collapse
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.
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.