Early trade in New York: extends drop against euro

The US dollar extended its decline against the euro on Thursday following less dovish than expected comments from the head of the European Central Bank, but remained higher against the Norwegian crown and emerging market currencies. Analysts said the euro continued to gain against the dollar after ECB President Mario Draghi said on Wednesday that the central bank needed more time before deciding on further stimulus.
"Draghi's comments put things into perspective, and that allowed the euro a little bit of an updraft," said Axel Merk, president and chief investment officer of Palo Alto, California-based Merk Investments. Merk said traders were looking for an excuse to trade on the view that the Federal Reserve would be slow in hiking rates, and found such an excuse in US durable goods orders data. Traders also looked ahead to Fed Chair Janet Yellen's speech at 5 pm ET (2100 GMT).
The Commerce Department said on Thursday capital goods orders excluding military wares and aircraft, a closely watched proxy for business spending plans, dropped 0.2 percent last month, a slightly bigger fall than analysts polled by Reuters had expected. The dollar slipped to a nearly one-week low against the Japanese yen at 119.255 yen and fell against the Swiss franc. The dollar remained near a 13-year high against the Norwegian crown after the Norwegian central bank unexpectedly cut interest rates to record lows to boost growth in an economy struggling with the falling price of oil, its main export. The dollar was last up 1.85 percent against the crown at 8.4390 crowns after hitting 8.4842 crowns, its highest since mid-2002.
The dollar was also higher against riskier emerging market currencies, and hit 17.3409 pesos, its highest level against the Mexican currency on record. The dollar hit a fresh record high against the Brazilian real of 4.2482 reals. The euro was last up 0.67 percent against the dollar at $1.12595. The dollar was down 0.64 percent against the yen at 119.525 yen. The dollar was last down 0.88 percent against the Swiss franc at 0.97110 franc. The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.38 percent at 95.694.