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Dollar mixed amid Fed tapering uncertainty

Published 08/15/2013, 11:18 AM
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Investing.com - The dollar was mixed against the other major currencies in volatile trade on Thursday as U.S. economic data added to uncertainty over how soon the Federal Reserve may start to phase out its stimulus program.

During U.S. morning trade, the dollar was little changed against the euro, with EUR/USD dipping 0.04% to 1.3250, after falling as low as 1.3205 earlier.

The greenback strengthened broadly after the Department of Labor said the number of people who filed for unemployment assistance in the U.S. fell to the lowest level since January 2008 last week, dropping by 15,000 to 320,000.

Another report showed that U.S. consumer prices rose by a seasonally adjusted 0.2% in July, in line with forecasts. Core consumer prices, excluding food and energy costs, also rose 0.2%, matching forecasts.

The data reinforced the view that the economic recovery is strong enough for the U.S. central bank to start winding up its USD85 billion-a-month asset purchase program later this year.

However, separate reports showed that U.S. industrial production was flat in July, missing expectations for a 0.3% increase. Meanwhile, manufacturing activity in the Philadelphia-region expanded at the slowest pace in four months in August and manufacturing activity in the Empire state fell unexpectedly.

The dollar was lower against the yen, with USD/JPY down 0.31% to 97.81 after briefly touching highs of 98.64.

The pound was close to two-month highs against the dollar, with GBP/USD up 0.41% to 1.5563.

Sterling was boosted after official data showed that U.K. retail sales rose much more strongly than expected in July, fuelling optimism over the economic recovery.

Retail sales climbed 1.1% in July, beating expectations for a 0.6% gain and were 3% higher from a year earlier, as sunnier summer weather boosted sales of food, alcohol, clothing and outdoor items.

The dollar was also lower against the Swiss franc, with USD/CHF sliding 0.13% to 0.9345.

The greenback was mixed against its Australian, New Zealand and Canadian counterparts, with AUD/USD falling 0.33% to 0.9091, NZD/USD up 0.14% to 0.8038 and USD/CAD edging up 0.01% to 1.0341.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.04% to 81.70.




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