The dollar fell on Thursday after an outbreak of hostilities in the Ukraine drove up commodity prices, to which it is inversely correlated. Early gains after the release of better-than-expected Durable Goods Orders were wiped out following news of a shoot-out between Pro-Russian rebels and Ukrainian soldiers which claimed 5 of the rebels’ lives. Vladimir Putin’s warning that there would be “consequences” if Kiev used military force against its own people, led to a sudden bump in risk aversion as it suggested Russia might invade.
New Orders for Manufactured Durable Goods surged in March, rising 2.6% versus the 2.0% expected. The gains built on a 2.1% rise in February. Durable goods minus big-ticket one-off transportation orders also rose – by 2.0% in March versus the 0.6% investors had priced in.
Other data on Thursday showed a rise in New Jobless Claims to 329k, which was higher than the 315k expected. Continuing Claims, however, fell more than forecast to 2680k, versus the 2735k traders had been waiting for.