Dollar remains broadly lower after mixed U.S. data, focus on Fed

Published 11/15/2012, 10:55 AM
Updated 11/15/2012, 10:56 AM
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Investing.com - The U.S. dollar remained broadly lower against the other major currencies on Thursday, after the release of mixed U.S. economic reports dampened demand for the greenback, while markets eyed a highly anticipated speech by Federal Reserve Chairman Ben Bernanke.

During U.S. morning trade, the dollar was sharply lower against the euro, with EUR/USD climbing 0.46%% to 1.2793.

The greenback pushed lower against the euro after the Federal Reserve Bank of Philadelphia said that its manufacturing index tumbled by 16.5 points to minus 107 in November from October’s reading of 5.7, contracting at the fastest rate in four months.

A separate report showed that the New York Federal Reserve’s index of manufacturing conditions improved unexpectedly in November, but remained in contraction territory for the fourth consecutive month.

Earlier in the day, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending November 10 rose by 78,000 to a seasonally adjusted 439,000, the highest level since April 2011, compared to expectations for an increase of 14,000 to 375,000.

Meanwhile, sentiment on the euro remained fragile after official data showed that the euro zone's economy shrank 0.1% in the third quarter, following a contraction of 0.2% in the preceding quarter. A technical recession is defined as two straight quarters of contraction.

The data came after reports showed that the pace of Germany's economic growth slowed to 0.2% in the third quarter from a 0.3% increase in the previous quarter, while France's economy’s expanded 0.2%, following contraction of 0.1% in the previous quarter.

The greenback was also lower against the pound, with GBP/USD adding 0.23% to 1.5875.

The pound came under pressure after official data showed that retail sales in the U.K. fell by a seasonally adjusted 0.8% in October, compared to expectations for a 0.1% fall.

Retail sales for September were revised down to a 0.5% gain from a previously reported increase of 0.6%.

Elsewhere, the greenback was sharply higher against the yen, with USD/JPY rallying 1.05% to trade at 81.09, but dropped against the Swiss franc, with USD/CHF sliding 0.42% to 0.9411.

The yen came under broad selling pressure after Shinzo Abe, the head of Japan's main opposition party and frontrunner in next month's election, called for aggressive monetary easing by the Bank of Japan to support growth.

The greenback was mixed to lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD falling 0.15% to 1.0023, AUD/USD declining 0.44% to 1.0330 and NZD/USD edging 0.07% higher to 0.8109.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.19% to 81.02.

Also Thursday, data showed that consumer price inflation in the U.S. rose in line with expectations in October, while prices excluding food and energy costs increased more-than-expected.

Later in the day, a speech by Fed Chairman Bernanke was to be closely watched for any indications on the future possible direction of monetary policy.


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