CURRENCIES: Dollar Regains Ground After Weaker Data

By Anora Mahmudova and William Watts, MarketWatch Features Dow Jones Newswires

Resource currencies strengthen after oil jump

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The dollar regained ground Monday, recouping modest losses that followed weaker-than-expected data on orders for big-ticket items.

Meanwhile a jump in oil prices strengthened currencies of countries heavily reliant on commodities.

The ICE Dollar Index , a measure of the currency against a basket of six major rivals, was little changed at 97.438 late Monday in New York.

Earlier, the dollar fell against major rivals after U.S. government data showed orders for durable goods, such as planes and computers, fell 1.1% in May (http://www.marketwatch.com/story/orders-for-durable-goods-backslide-again-2017-06-26) following a similar decline in April. Economists polled by MarketWatch had forecast a 0.8% decline. But throughout the session, the dollar regained ground, with analysts suggesting positioning ahead of Federal Reserve Chairwoman Janet Yellen's speech on Tuesday.

"There was a selloff in the wake of weak durable-goods data, amid concerns about the pace of economic growth. But it appears traders did not want to have short positions ahead of Yellen's speech. As a result, possible short-covering had pushed the dollar back up a bit," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

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The euro declined modestly, changing hands at $1.1281 late Monday, down 0.1% from $1.1193 late Friday in New York. Earlier, the shared currency failed to get a boost from German data that showed business sentiment hit a record in June. The Ifo business climate index rose to a higher-than-expected 115.1 points (http://www.marketwatch.com/story/german-business-sentiment-hits-record-in-june-2017-06-26).

San Francisco Fed President John Williams said early Monday that gradual rate hikes are needed (http://www.marketwatch.com/story/feds-williams-says-gradual-rate-hikes-are-needed-for-growth-2017-06-26) to avoid overheating the economy, while Fed Gov. Jerome Powell said he sees room to relax (http://www.marketwatch.com/story/feds-powell-reiterates-his-call-for-relaxing-some-banking-regulations-2017-06-26) certain banking rules. On Tuesday, Fed Chairwoman Janet Yellen and Philadelphia Fed President Patrick Harker will speak in London, while Williams will give another speech in Australia.

In other currencies, the pound rose marginally after U.K. Prime Minister Theresa May reached a deal with Northern Ireland's Democratic Unionist Party for its lawmakers to support the Conservatives' minority government (http://www.marketwatch.com/story/uks-dup-reaches-deal-to-support-minority-tory-government-reports-2017-06-26). Sterling bought $1.2720, compared with $1.2718 late Friday in New York.

The dollar bought Yen111.88 compared with Yen111.29 on Friday.

Resource-reliant currencies benefited from higher oil prices Monday. The Canadian dollar rose, with the dollar buying C$1.3252, compared with C$1.3266 late Friday.

The Russian ruble and Mexican peso rallied, rising about 0.9% each. The dollar bought 58.9292 rubles and 17.8457 pesos late Monday in New York.

Sara Sjolin contributed to this report.

(END) Dow Jones Newswires

June 26, 2017 16:14 ET (20:14 GMT)