The dollar got off to a positive start against its major rivals Tuesday, but has pared its early gains. The release of a pair of weaker than expected U.S. economic reports this morning was largely responsible for the pullback.
With imports rising and exports edging lower, the Commerce Department released a report on Tuesday showing the U.S. trade deficit widened more than expected in the month of October. The report said the trade deficit widened to $48.7 billion in October from a revised $44.9 billion in September. Economists had expected the deficit to widen to $47.5 billion.
Activity in the U.S. service sector grew at a slower than expected rate in the month of November, the Institute for Supply Management revealed in a report released on Tuesday.
The ISM said its non-manufacturing index dropped to 57.4 in November from 60.1 in October, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to dip to 59.0.
The dollar has risen to around $1.1815 against the Euro Tuesday afternoon, from an early low of $1.1876.
Eurozone retail sales declined at a faster-than-expected pace in October, after rebounding in the previous month, data from Eurostat showed Tuesday.
Retail sales dropped 1.1 percent month-over-month in October, reversing September's 0.8 percent rise, which was revised up from 0.7 percent. Economists had expected a 0.7 percent fall for the month.
Eurozone private sector growth accelerated as estimated in November, final data from IHS Markit showed Tuesday. The composite output index rose to 57.5 from 56.0 in October. The score was unchanged from the earlier flash estimate.
British Prime Minister Theresa May failed to strike a Brexit divorce deal with EU negotiators. The talks stumbled yesterday after DUP refused to support Downing Street's commitment to keep Northern Ireland aligned with EU laws.
"Despite our best efforts and significant progress…it was not possible to reach a complete agreement today," EU Commission President Jean-Claude Juncker said in a press conference on Monday.
The buck climbed to an early high of $1.3366 against the pound sterling Tuesday, but has since retreated to around $1.3435.
British service sector activity logged a further solid expansion in November, though the rate of growth eased since October, survey data from IHS Markit showed Tuesday. The IHS Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index, dropped to 53.8 in November from 55.6 in October. Economists had expected the index to drop to 55.0.
Like-for-like sales in the United Kingdom were up 0.6 percent on year in November, the British Retail Consortium said on Tuesday. That follows the 1.0 percent contraction in October.
The greenback reached a high of Y112.865 against the Japanese Yen Tuesday, but has since eased back to around Y112.585.
The services sector in Japan continued to expand in November, albeit at a slower pace, the latest survey from Nikkei showed on Tuesday with a PMI score of 51.2. That's down from the 26-month high of 53.4 in October, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org