The mighty US dollar loses its lustre as crowded trades and poor US economic data releases bite

 A look at the spot market exchange rates shows the pound sterling to US dollar (Currency:USD) exchange rate 0.5 pct higher on a day-to-day basis. GBP/USD is seen at 1.5210.

The euro dollar exchange rate is 0.9 pct higher at 1.3055. The US dollar to Canadian dollar rate is 0.4 pct lower at 1.0313.  

Please Note: The above are spot market quotes to which your bank will affix its own discretionary spread when delivering your currency. However, an independent FX provider will guarantee to better your bank's offer; thereby delivering you more currency. Please find out more here.

The decline of the US dollar and the ascent of the Swedish Krona would certainly be the two talking points on currency markets today.

According to Kathy Lien at BK Asset Management the problem for the US dollar at present is the poor US economic data being released. Lien says:

"This time the weakness is not caused by only profit taking although it contributed to the sell-off. The real driver of the pullback is disappointing U.S. data.

"Following this morning's economic reports, the EUR/USD broke above 1.30 and USD/JPY tested 101.  U.S. stock futures gave up their earlier gains and traded lower at the open.  

"While we don't feel that the data was terrible enough to warrant this reaction in currencies and equities, the long dollar / long stock trade is getting crowded and any piece of bad news was enough reason for investors to bail."

First quarter GDP growth was revised down to 2.4% from 2.5% as lower government spending and weaker inventory rebuilding offset stronger personal consumption. U.S. jobless claims also rose to 354K from 344K and continuing claims reached 2.986 million, up from 2.923 million.

While they missed expectations, these economic reports don't take the country off the road to recovery.  

While the economy grew less than expected in the first quarter, consumer consumption saw its biggest gain since the fourth quarter of 2010.  

"Healthy U.S. demand should eventually lead to faster inventory replenishment and stronger underlying growth.  Jobless claims increased but the absolute amount of claims filed is still relatively low and consistent with a continued labor market recovery.  We feel that in due time, investors will realize that the Fed's plans for tapering asset purchases won't change because of today's economic reports," says Lien.