Dollar gains on durable goods report

Dollar gains on durable goods report

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The US dollar was stronger versus the euro on Tuesday on a report from the Commerce Department that showed durable goods orders up 5.2 percent in December, against an expected rise of only 1.6 percent as well as on continuing hopes that the Federal Reserve will cut interest rates again later in the week.

The news on durable goods orders, however, has some analysts expecting only a quarter of a percentage point cut in interest rates rather than the half a percentage point many had been expecting.

At just after noon in New York, the greenback traded at $1.4766 to the euro, while the yen also declined in relation to the US currency, to ¥106.9950 to the dollar as some investors returned to risky carry trades.

The yen lost the most in relation to the Brazilian real and the Norwegian krone as it traded at ¥60.313 to the real and at ¥19.659 to the krone.

The return to carry trades also sent the Swiss franc lower against all major currencies.

In early afternoon trade in New York, the Swiss franc traded at SFr1.0942 to the dollar, at SFr1.6157 to the euro, and at SFr2.1728 to the pound.

Besides the return to carry trades, the Swiss franc was also hurt by a report that Swiss exports were lower in December, down 2.9 percent from the month before, sending its trade surplus down to SFr198 million ($182 million).