Dollar slips on poor US economic data

Disappointing US economic data led to a sluggish start to the week for the dollar in forex trading.

The figures, published on Friday, revealed that investment spending plans from US businesses dropped for the seventh successive month in March - reinforcing expectations that the Federal Reserve will not raise interest rates in the near future.

In response to the statistics, the dollar index - which tracks the greenback against six other major currencies - dipped to 96.985 on Friday, close to a three-week low.

And the dollar continued in similar fashion on Monday morning, falling to 118.93 yen - a drop of about 0.1 per cent across the day, and well beneath last week's highest point of 120.10 yen, reached on Thursday.

Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York, was quoted by Reuters as saying: "The US dollar finished the week on seemingly fragile footing. The question investors are asking is if the steady drum beat of disappointing US economic data turns the dollar's bull case on its head."

Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm, predicted that dollar/yen trading will remain within its current range of 118 to 120 for the foreseeable future.

The euro also continued its recent struggles on Monday as fears about Greece defaulting on its debts refused to abate.

On Friday, eurozone finance ministers speaking at a meeting in the Latvian capital Riga issued a stark warning that Greece would not be given any additional bailout funding until it agreed to a full plan of economic reforms.

The euro dipped around 0.2 per cent to $1.0855 this morning, well down on the recent high of $1.0900 reached last Friday amid greater positivity about the Greek negotiations.