Currencies and Economic News

In the currency market, the dollar was off sharply against the euro. Late Monday, the euro was trading at $1.5923 vs. $1.5841 on Friday.

Traders responded to more weak economic numbers.

The Conference Board reported that its index of leading economic indicators, which attempts to forecast turning points in the economy, declined 0.1% in June. That came on top of a downward revision to the May result, from a 0.1% gain to a decline of 0.2%.

“The domestic economy is showing no sign of strength,” wrote Board economist Ken Goldstein. “The deep financial crisis, a prolonged, intense slump in housing, high gasoline and food prices, weak consumer confidence and a weak dollar are all combining to produce unrelenting downward pressure on economic activity.”

Dismal as it was, the index was likely unrealistically rosy. Ian Shepherdson, chief U.S. economist at High Frequency Economics, noted that June's results were “saved from a much larger drop” by a change in building permit rules for multifamily units in New York City that pushed up total starts.

Even Treasury Secretary Paulson is finally facing reality, saying that, “This is a tough time … We're going to be in a period of slow growth for a while.”