The dollar failed to make up any ground versus the euro Thursday morning, even after Portugal’s parliament failed to approve austerity measures designed to ease its sovereign debt crisis.
Portugal’s parliament rejected sweeping budget cuts proposed by Prime Minister Jose Socrates, prompting Socrates to resign.
European Union officials is taking up the sovereign debt issue at a two-summit beginning today. A bailout for Portugal is likely to happen soon, as the nation’s borrowing costs have soared to unsustainable levels.
Still, the dollar has struggled versus the euro, with traders keeping focus on the painfully slow economic recovery in the U.S.
The latest figures on the housing market show little improvement in that key sector of the broader economy.
The buck eased to $1.4130 versus the euro, edging back toward a 4-month low of $1.4247 set earlier in the week.
Eurozone private sector activity expanded at a weaker pace in March, led by manufacturing and services, preliminary results of the purchasing managers’ survey from Markit Economics showed Thursday.
The Markit flash Eurozone composite output index fell to 57.5 from 58.2 in February.
The dollar strengthened slightly versus the sterling overnight, improving to $1.6150 after touching a yearly low of $1.64 earlier in the week.
U.K. retail sales volume, including automotive fuel declined 0.8 percent in February from January, the Office for National Statistics said on Thursday. Economists had expected it to fall 0.6 percent, reversing a 1.5 percent rise in January.
There was virtually no movement for the dollar against the yen for a fifth day. The pair is locked in one of the tightest trading ranges in memory, holding just below Y81.
Last week, the dollar hit a record low of Y76.30 before the G7 intervened on behalf of Japan to weaken the yen.
Looking at today’s economic calendar from the U.S., traders might focus on the durable goods orders report for February, slated for release from the Commerce Department, at 8.30 a.m. ET. Economists predict that durable goods orders rose 1.5 percent during the month.
At 8.30 a.m. ET, the US Labor Department will release its customary weekly jobless claims report for the week ended March 19. Economists project that there will not be any change this week around and jobless claims might stand at 385,000.