Dollar trims gains after flurry of robust U.S. data

Published 02/16/2012, 10:35 AM
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Investing.com - The U.S. dollar pared gains against its global counterparts on Thursday, as market sentiment improved following the release of a flurry of broadly better-than-expected U.S. data, but uncertainty over a second bailout deal for Greece continued to cloud the outlook for riskier assets.

During U.S. morning trade, the dollar was higher against the euro, with EUR/USD slipping 0.14% to hit 1.3048.

The euro found support after official data showed that U.S. initial jobless claims unexpectedly fell to their lowest level since March 2008 last week, declining to 348,000, confounding expectations for an increase to 364,000.

Data also showed that an index of manufacturing activity in the Philadelphia area rose more-than-expected in February, advancing to 10.2, above expectations for a rise to 9.0.

In a separate report, the U.S. Census Bureau said the number of building permits issued in January rose 0.7% to a seasonally adjusted 0.68 million, broadly in line with market expectations.

But concerns over a delay on a second bailout for Greece persisted after a teleconference of euro zone finance ministers on Wednesday failed to reach a decision about the issue.

European Union officials are believed to be looking at delaying all or part of Greece's bailout until after a general election in the country, which is expected to take place in April.

The greenback was also supported after ratings agency Moody's warned that it may cut the credit ratings of 114 banks in 16 countries across Europe, citing banks' vulnerability to the sovereign debt crisis in the euro zone.

The greenback was lower against the pound, with GBP/USD adding 0.40% to hit 1.5755.

Sentiment on the pound was somewhat stronger after the Bank of England’s quarterly inflation report on Tuesday revised up the bank’s two-year inflation forecast, dampening expectations for more quantitative easing measures.

Earlier Thursday, a report by lender Nationwide showed British consumer confidence climbed to its highest level in five months in January as people's view of the outlook six months ahead grew more upbeat.

The greenback was higher against yen and the Swiss franc, with USD/JPY adding 0.43% to hit 78.77 and USD/CHF up 0.19%, to hit 0.9253.

Elsewhere, the greenback was lower against its Canadian and Australian cousins but was higher against its New Zealand counterpart, with USD/CAD slipping 0.11% to hit 0.9988, AUD/USD adding 0.36% to hit 1.0733 and NZD/USD down 0.19% to hit 0.8314.

Earlier in the day, official data showed that the Australian economy added 46,300 jobs in January, beating expectations for a 10,500 gain, bringing the unemployment rate down to 5.1%.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.21% to hit 79.91.

Also Thursday, official data showed that U.S. core producer price inflation rose more-than-expected in January, rising by 0.4%, while PPI rose by 0.1%, slightly below expectations for a 0.3% gain.



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