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Forex - Dollar trims gains after upbeat U.S. data, debt vote eyed

Published 07/28/2011, 11:01 AM
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Investing.com – The U.S. dollar trimmed gains against most of its major counterparts on Thursday, as market sentiment was boosted after U.S. data showed that jobless claims fell more-than-expected last week, dropping below the key 400,000 threshold for the first time since April.

During U.S. morning trade, the greenback was higher against the euro, with EUR/USD shedding 0.48% to hit 1.4299.

The euro weakened earlier after the Italian Treasury auctioned approximately EUR7.97 billion of government debt, but the yield on 10-year bonds rose to 5.77%, up from 4.94% at the previous auction in June.

The greenback was also higher against the pound, with GBP/USD dipping 0.03% to hit 1.6325.

Earlier in the day, a report showed that British retail sales fell at their fastest pace in a year in July, as consumers cut back on spending.

Elsewhere, the greenback was down against the yen but up against the Swiss franc, with USD/JPY slipping 0.17% to hit 77.84 and USD/CHF rising 0.21% to hit 0.8030.

Japan’s Finance Minister Yoshihiko Noda repeated his warning against pushing the yen too high earlier Thursday, saying that he was continuing to watch markets closely.

Meanwhile, the greenback was broadly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD sliding 0.09% to hit 0.9488, AUD/USD dipping 0.03% to hit 1.1016 and NZD/USD climbing 0.27% to hit 0.8722.

Earlier in the day, the Reserve Bank of New Zealand left its benchmark interest rate unchanged at 2.5% in a widely expected decision, but flagged an imminent rate increase.

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

The Department of Labor said earlier that the number of individuals filing for initial jobless benefits last week fell by 24,000 to a seasonally adjusted 398,000, beating expectations for a drop to 412,000. 
 
A separate report showed that pending home sales in the U.S. rose unexpectedly in June, with all regions showing strong double-digit gains from a year earlier.

Later in the day, U.S. congressional leaders were due to vote on a proposed plan to raise the U.S. debt ceiling, in order to avert a sovereign debt default ahead of the August 2 deadline.

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