The dollar strengthened to almost a one-month high after a report showed U.S. orders for durable goods unexpectedly rose in April.
The euro (CME:E6M14) headed for the biggest monthly drop since January versus the U.S. currency after European Central Bank President Mario Draghi signaled yesterday that policy makers are ready to expand stimulus. Hungary’s forint (CME:WHM14) extended losses after the central bank cut interest rates to a record low. The Turkish lira (CME:E4M14) fell the most in a week as consumer confidence dropped. A gauge of volatility in Group of Seven currencies fell to almost the lowest in seven years.
“The data has a soft impact on euro-dollar, the surprise here is positive,” said Athanasios Vamvakidis, head of Group of 10 currency strategy at Bank of America Corp. in London. “We need an even stronger, more widespread, positive data surprises. We need six months of consistently strong data.”
The Bloomberg Dollar Spot Index, which tracks the greenback against the performance of a basket of 10 major currencies, gained 0.1% to 1,011.19 as of 9:55 a.m. New York time. The index reached 1,012.43 on May 23, the strongest level since April 24.
The euro fell 0.1% to $1.3636 and is down 1.7% this month, the most since a 1.9% drop in January. Europe’s shared currency also slipped 0.1% to 139.05 yen after declining to 138.15 on May 21, the least since February 6. The dollar was little changed at 101.98 yen.
JPMorgan Chase & Co.’s volatility index for the currencies of the G-7 nations fell to 6.2%. It touched 6% on May 9, the lowest level since 2007.
Hungary’s central bank continued Europe’s longest-running uninterrupted monetary-easing cycle, cutting the main interest rate for a 22nd consecutive month after inflation unexpectedly turned negative last month. The National Bank of Hungary cut the two-week deposit rate to 2.4%, matching the estimate of all 22 economists in a Bloomberg survey.
The forint fell 0.2% to 303.55 per euro and declined 0.3% to 222.59 versus the dollar.