Dollar slumps against Pound and Euro with Retail Sales decline

Here's the top story of the day on forex.The dollar relinquished its recent gains versus the majors, tumbling by over four big figures against the pound to 1.4960. The forex economic data released earlier in the session was mixed, with durable goods, factory orders, pending home sales and non-manufacturing ISM reported in the Tuesday session.

The dollar declined from a five-week high against the euro as well on the speculation reports this week which show U.S. retail sales and manufacturing has weakened as recession continues to spread through the world’s largest economy. The Australian and New Zealand dollars rose from four-week lows on speculation a rebound in Asian stocks will give investors the confidence to buy higher-yielding assets

Although the calendar for today that is Wednesday is light, traders will closely scrutinize the December ADP private sector payrolls figure – which is estimated to post a loss of 475k jobs, deteriorating sharply from a month earlier at a loss of 250k jobs. The report will be assessed as a proxy to Friday’s key non-farm payrolls figure and unemployment rate, which are seen at -500k and 7.0%, respectively. Further, the unemployment rate will be at its highest level since 1993.