Dollar slips after poor US durable data

The dollar slipped against the euro on Thursday after surprise weakness in US durable goods orders data the previous day cast a shadow over investor optimism on the US economy. Orders for US durable goods tumbled 4.9 percent in July, the biggest drop in more than a year and a half.
It contrasted with an improvement in euro-zone economic sentiment of late that has helped lift the single currency to a one-week high.
The euro has gained momentum since news on Tuesday that Germany's ZEW investor confidence indicator had shot up to a 17-month high.
A similar rise in the Ifo could help bolster hopes for a recovery in the euro zone's largest economy.
"The euro zone economy looks better now as a reaction to the past pessimism toward it, which was overdone," said Daisuke Uno, a market analyst at Sumitomo Mitsui Banking Corp.
Worries about record oil prices sapping the US economy's strength also weighed on the dollar. US crude oil futures hit a new high of $68.00. "As the market has started to focus on the negative impact on the US economy from higher oil prices, the worse-than-expected data was taken as an incentive to sell the dollar," Uno said.
The euro rose to around $1.2300 from around $1.2275 in late Wednesday US trade. The euro also pushed up as high as around 135.60 yen before coming back to around 135.25 yen. The dollar fell to 109.90 yen from around 110.20 yen in late US trade, reversing earlier slim gains built on the back of a fall in Tokyo share prices.
Earlier, Chicago Federal Reserve President Michael Moskow said higher US interest rates are needed to keep inflation contained as the labour market tightens and energy prices climb.
Moskow also said the threat of energy prices raising core inflation was higher than a year ago. Most analysts expect the Fed to raise rates to at least 4 percent by the year-end.
Some traders said the dollar was hurt after US rating firm Moody's downgraded debt of Ford and General Motors to junk status late on Wednesday.
Ford and GM are among the biggest issuers of corporate debt in the United States, with well over $400 billion of combined debt as of June, or more than 5 percent of the entire US corporate debt market.
The downgrades could sap foreign investors' appetite for US corporate bonds. That would be detrimental for the dollar, particularly after foreign investors' record $52 billion net buying of US corporate bonds in June, accounting for a big chunk of the $71.2 billion of net capital inflows to the US that month.