The US dollar slipped back yesterday, failing to build on Tuesday’s more positive outlook. With its two major data points of the day both showing worse than expected results, the dollar fell against most of its partners, including to a two week low against the euro. It did, however, manage to end the day slightly higher against sterling. The drivers of these movements were the durable goods orders, which showed an unexpected decline, and Gross Domestic Product which showed that the economy shrank by 2.9% for the first quarter of 2014. This was more of a contraction than expected, and in fact was a level not seen since the height of the recession.
Today sees just the one influential release from the US to provide some opportunity for movement – the unemployment claims. As the labour market is continually an important indicator of economic health, its performance is likely to have an impact on whether the currency continues to decline or in fact reverse this trend. This will be the major talking point, although a few less significant releases may also affect the dollar’s performance.