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Forex - Dollar turns lower on U.S. data, Italy hopes

Published 11/17/2011, 11:38 AM
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Investing.com - The U.S. dollar turned lower against its major counterparts on Thursday, as risk appetite improved after better-than-expected U.S. data on jobless claims but investors remained jittery as concerns over the euro zone debt crisis persisted.

During U.S. morning trade, the dollar was up against the euro, with EUR/USD rising 0.40% to hit 1.3516.

The euro found support after Italian Prime Minister Mario Monti outlined a broad raft of policy measures aimed at restoring investor confidence, including reform of the country’s pension and taxation system as well as labor market reforms.

But Spanish 10-year bond yields surged to a euro-era high of 6.97% at an auction of government debt, close to the 7% threshold widely seen as unsustainable in the long term.

Meanwhile, French 10-year bond yields also climbed to their highest level since the inception of the single currency, adding to fears over sovereign debt contagion to core euro zone economies.

The greenback was also lower against the pound, with GBP/USD climbing 0.33% to hit 1.5781.

The pound found support after an unexpected rise in U.K. retail sales in October, as retailers offered widespread discounts in the run up to Christmas.

In addition, the greenback was lower against the yen and the Swiss franc, with USD/JPY dipping 0.06% to hit 76.99 and USD/CHF shedding 0.29% to hit 0.9166.

The Bank of Japan said that the value of the yen against the greenback remained at more or less the same levels as last month, easing speculation of a new intervention on the foreign exchange market.

Elsewhere, the greenback was lower against its Canadian counterpart but higher against its Australian and New Zealand cousins, with USD/CAD slipping 0.05% to hit 1.0235, AUD/USD shedding 0.26% to hit 1.0054 and NZD/USD falling 0.52% to hit 0.7616.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.36% to hit 78.21.

Earlier in the day, risk appetite was boosted after the Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell to a seven-month low.

A separate report showed that manufacturing activity in the Philadelphia-region expanded at a slower rate than expected in November.

Also Thursday, official data showed that the number of building permits issued in the U.S. rose more-than-expected in October, while U.S. housing starts were largely unchanged last month.


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