Dollar Slips To 7-Week Low Versus Euro

(RTTNews) - The dollar generally showed weakness on Wednesday, falling to a seven-week low versus the euro. Disappointing economic data out of the U.S. weighed on the greenback.

Two major reports were released about the world's biggest economy, with the data pointing to slowdowns in the manufacturing and in the housing sectors.

The New York Federal Reserves' Empire State index fell to 4.48 for February, compared to a reading of 12.51 for January. The index is a key regional manufacturing measure covering business activity in the State of New York, one of the most economically important states in the U.S.

Any reading above zero indicates expansion in the sector. January's decline suggests that manufacturing in New York State continued to expand during the month, but at a slower pace. Moreover, the slackening was more severe than economists had predicted. Experts had expected a reading of 8.5.

A separate report suggested sagging confidence in the U.S. home building sector. The National Association of Home Builders said its housing market index slipped to 46 in February compared to a reading of 56 in the previous month.

The dollar lost ground against the euro, moving to 1.3770 and adding to a decline that has marked the past couple weeks. The slide brought the greenback to lowest level since the beginning of the year.

Germany's investor confidence deteriorated sharply in February, and to a larger extent than expected by economists, data from the ZEW indicator of economic sentiment showed. Economic sentiment fell to 55.7 in February from 61.7 in January. The score was expected to drop modestly to 61.5.

Trading against the pound was choppy, eventually settling in a narrow range around 1.66825. Earlier this week, the dollar came off its lowest level since 2011.

Figures from the U.K.'s Office for National Statistics showed that inflation eased unexpectedly to 1.9 percent in January from 2 percent in December. The rate was expected to remain at 2 percent.

There was also choppy trading versus the yen. The greenback generally drifted lower, reversing gains posted in the previous couple days. Tuesday's move took the dollar to 102.337 versus the Japanese currency.

The Bank of Japan kept its monetary easing plan unchanged, but doubled a funding tool to 7 trillion yen to stimulate bank lending. The revision allows financial institutions to borrow funds from the central bank up to an amount that is twice as much as the net increase in their lending.