The US dollar crumbled today as it lost value against all of the other major currencies due to a decline in the Philadelphia Fed manufacturing release, and increased speculation that the Fed will resort to a 50bp rate cut in March. All of the commodity currencies posted major gains as the US economy continued to weaken, while the Euro hit a two week high against the fading dollar. The Swiss Franc and the British pound took the biggest bite out of the US dollar. The Pound was driven up as retail sales unexpectedly surged to 5.6 percent for the year indicating that consumer spending to be holding up amid lowered growth prospects.
Bearish sentiment took hold of the security markets today as the negative economic releases moved investors into a selloff, and cut short the morning advances led by Cisco and Research in Motion. Increased volatility took hold of the DJIA as fell 142.96 points after rising 70 points this morning to 12,284.30, with Verizon and AT&T leading the winners, while Exxon and Chevron took the biggest blow as oil fell to $97.40 a barrel. In the broader indices, the S&P500 fell a moderate 17.50 points to 1,342.53, with Choicepoint Inc topping the advances, while Lithia Motors and First Mercury Financial were the forerunners for the losers.
US Treasuries jumped as growing recessionary concerns increased the appeal of the safe haven of risk free investments, and sent yields spiraling down. The 10-Year yield plunged to 3.76 percent, while the 2-Year yield sank to 1.97 percent. For tomorrow, our attention will be mainly focused on the Eurozone PMI and New Orders data, along with the Canadian Retail Sales figures.