Data showing a seventh straight monthly decline in US business spending plans knocked the dollar lower on Friday and gave Federal Reserve policymakers even less reason to raise near-zero interest rates any time soon. The euro backed away from a two-week high against the dollar, however, after euro zone finance ministers told Greece it will get no more aid until it strikes a full economic reform plan.
US non-defence capital goods orders excluding aircraft, a proxy for business spending activity, declined 0.5 percent last month after a revised 2.2 percent drop in February, the US Commerce Department said. Economists had forecast core capital goods orders gaining 0.3 percent in March, according to a Reuters poll.
Friday's durable goods report followed lukewarm data on US retail sales, employment and housing starts, which suggest soggy growth that could cause Fed policymakers to delay raising rates for the first time in nearly a decade until later this year. "This puts more concern on the performance of the US economy and adds to the pressure the dollar has experienced over the last month," said Sireen Haraji, currency strategist at Mizuho in New York. "Markets are concerned that this might postpone the Fed normalising policy."
Against the yen, the dollar was off 0.35 percent at 119.10 yen, while sterling was up 0.50 percent to $1.5130. The dollar index touched a three-week low and was last down 0.3 percent. The euro was little changed at $1.0830, after touching a two-week high of $1.09 against the dollar, as lingering hopes that cash-strapped Greece was making progress toward securing fresh funding were dashed.