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Forex - Dollar erases gains stemming from soft U.S., European data

Published 11/14/2012, 09:53 PM
Updated 11/14/2012, 09:56 PM
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Investing.com - Profit taking sent the dollar erasing earlier gains against the world's major global currencies on Thursday.

The greenback firmed earlier after U.S. sales data and European production numbers disappointed.

In Asian trading on Thursday, EUR/USD was up 0.05% at 1.2741.

The dollar rose after weak data on both sides of the Atlantic painted a picture of a global economy battling strong headwinds.

In the eurozone earlier, official data revealed that industrial production declined 2.5% in September, well beyond expectations for a more modest 1.9% decline.

The numbers sparked fears that the eurozone's preliminary gross domestic product rate for the third quarter will disappoint later Thursday.

France, Germany and Italy are also to release individual GDP reports.

Meanwhile in the U.S., lackluster sales data kept investors parked in the safe-haven dollar.

The U.S. Commerce Department reported earlier that retail sales fell by a seasonally adjusted 0.3% in October, weaker than expectations for a 0.2% decline.

Core retail sales, which exclude automobile sales, came in flat last month.

Analysts were expecting core retail sales to rise 0.2% in October, after rising by an upwardly revised 1.2% in September.

Retail sales serve as a good barometer for U.S. economic health.

Meanwhile, separate data revealed that U.S. producer price inflation fell unexpectedly in October, while core prices also dipped.

The Labor Department reported that producer prices fell by a seasonally adjusted 0.2% in October, compared to expectations for a 0.2% increase, after rising 1.1% in September.

The core producer price index declined 0.2% in October, defying expectations for a 0.1% increase, after coming in September.

Ongoing uncertainty surrounding the fiscal cliff in the U.S. swayed investors away from risk as well, which bolstered the dollar against the greenback.

Profit-taking cooled the U.S. currency's gains in early Asian trading.

The greenback was down against the pound, with GBP/USD trading up 0.09% at 1.5854.

The dollar was down against the yen, with USD/JPY trading down 0.03% at 80.22 and down against the Swiss franc, with USD/CHF trading down 0.06% at 0.9446.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD trading down 0.17% at 1.0022, AUD/USD up 0.05% at 1.0381 and NZD/USD trading up 0.19% at 0.8118.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.06% at 81.12.

The U.S. is to release a flurry of data, including reports on initial jobless claims, consumer price inflation, crude oil stockpiles, in addition to data on manufacturing activity in New York and Philadelphia.









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