The dollar was mixed against major currencies on Tuesday amid weak data from both the U.S. and the euro zone.
New orders for manufactured goods in November, down for four consecutive months, decreased 4.6 percent, the U.S. Commerce Department reported on Tuesday. The drop was much larger than a loss of 2.5 percent expected by analysts.
Economic activity in the non-manufacturing sector contracted in December, according to the Institute for Supply Management (ISM). The December index stood at 40.6 percent, 3.3 percentage points higher than the 37.3 percent registered in November. A reading below 50 indicates a contraction in the sector.
The ISM index for the service sector would fluctuate in a range of perhaps 35 to 45 for a couple of more months, signaling further contraction, but a potential bottoming process, said Brian Bethune of research group IHS Global Insight.
Pending U.S. home sales fell sharply in November, falling 4 percent, the National Association of Realtors (NAR) in Washington said on Tuesday. NAR Chief Economist Lawrence Yun blamed mounting job losses and very weak consumer confidence for the decline.
Euro area annual inflation is expected to be 1.6 percent in December 2008, down from 2.1 percent in November, according to a fresh estimate issued by Eurostat, the Statistical Office of the European Communities. It was the first time since August 2007 that inflation in the euro zone fell below the 2 percent target of the European Central Bank.
The U.S. Federal Reserve officials generally agreed that the uncertainty surrounding the economic outlook was considerable and that downside risks to even this weak trajectory for economic activity were a serious concern, according to minutes of the Fed meeting in December released on Tuesday.
Unable to cut interest rates below zero, Fed officials also discussed how they could address the financial crisis by using balance-sheet measures, such as buying up billions in Treasury debt or securities backed by Fannie Mae and Freddie Mac, the largest mortgage lenders in the United States.
The euro bought 1.3523 dollars in late New York trading compared with 1.3602 dollars it bought late Monday. The pound rose to 1.4939 dollars from 1.4723 dollars.
The dollar fell to 1.1796 Canadian dollars from 1.1893 Canadian dollars, and rose to 94.01 Japanese yen from 93.21 Japanese yen. It rose to 1.1177 Swiss francs from 1.1084 Swiss francs.
Source:Xinhua
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