Dollar turns steady to higher after U.S. economic reports

Published 12/27/2012, 10:44 AM
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Investing.com - The U.S. dollar turned steady to higher against the other major currencies on Thursday, after mixed U.S. economic reports, while U.S. lawmakers were to resume key budget talks.

During U.S. morning trade, the dollar was steady against the euro, with EUR/USD edging up 0.03% to 1.3234.

The Conference Board said its index of consumer confidence in the U.S. fell to 65.1 in December, a four-month low, from a reading of 71.5 in November, whose figure was revised down from 73.7.

A separate report showed that new home sales in the U.S. rose by 4.4% to a seasonally adjusted 377,000 units in November, compared to expectations for an increase to 378,000.

New home sales for October were revised down to 361,000 units from a previously reported 368,000.

The data came after the U.S. Department of Labor said in a report earlier that the number of individuals filing for initial jobless benefits in the week ending December 22 fell by 12,000 to a seasonally adjusted 350,000, compared to expectations for a decline of 2,000 to 360,000.

The greenback was almost unchanged against the pound, with GBP/USD dipping 0.02% to 1.6133.

Earlier in the day, industry data showed that mortgage approvals in the U.K. rose less-than-expected in November, increasing by 33,600 after a 33,100 rise the previous month. Analysts had expected mortgage approvals to rise by 34,600 in November.

Elsewhere, the greenback was higher against the yen, with USD/JPY rising 0.33% to trade at 85.91, and steady against the Swiss franc, with USD/CHF inching up 0.04% to 0.9137.

The yen remained close to multi-month lows against the dollar after Shinzo Abe was formally approved as Japan’s prime minister by the lower house of parliament on Wednesday. Abe has recently called for unlimited easing by the Bank of Japan in order to weaken the local currency and spur growth in the recession-hit economy.

Earlier Thursday, new Finance Minister Taro Aso said that Abe has ordered him to compile a stimulus package without adhering to a previously agreed cap on new bond issuance, while new Economics Minister Akira Amari said the yen was heading toward appropriate levels with its recent weakening, and that it was important to maintain the downward trend.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.04% to 0.9940, AUD/USD edging 0.17% lower to 1.0360 and NZD/USD slipping 0.27%, to 0.8174.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.02% to 79.69.

Market players remained focused on developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

President Barack Obama was to end his vacation and return to Washington on Thursday in order to take part in talks to avert the crisis ahead of the year-end deadline. Both chambers of Congress are also due to return to work on Thursday.


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