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US dollar drops to 2-month low amid stalling economy

Tuesday, 28 April 2015 5:35 PM [ Last Update: Tuesday, 28 April 2015 5:36 PM ]

The US dollar has dropped to a 2-month low amid worries that the American economy is stalling.

The US dollar has dropped to a 2-month low amid worries that the American economy is stalling following disappointing economic data.

An index tracking the dollar against major international currencies declined for a fifth day, the longest streak since July.

The Bloomberg Dollar Spot Index fell 0.7 percent to 1,170.59 on Tuesday, reaching the lowest level since February 25.

The US currency weakened 0.8 percent to $1.0977 per euro and slumped 0.2 percent to 118.82 yen.

"The current period of dollar weakness appears to be gaining momentum and accordingly likely has further to run," said Camilla Sutton, chief currency strategist at Scotiabank in Toronto.

Policy makers at the Federal Reserve will consider that data as they debate an interest-rate increase at a two-day meeting starting Tuesday.

A weaker-than-expected US consumer confidence this month further undermined the dollar. The Conference Board said its index that measures the degree of consumer optimism fell to 95.2 in April from 101.4 in March.

“Consumer confidence today is not helping the dollar at all,” said Omer Esiner, chief market analyst at the currency brokerage Commonwealth Foreign Exchange Inc. in Washington.

A report Wednesday is expected to show the US economy expanded at the slowest pace in a year. Gross domestic product grew 1 percent in the three months ending March 31, according to economists surveyed by Bloomberg.

The US Labor Department said earlier this month that the US economy created the fewest number of jobs in March since December 2013, heightening concerns over the recent slowdown in economic growth.

AHT/HRJ

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