The dollar has returned to nearly unchanged against all of its major competitors Thursday, on a very choppy trading day. Early losses turned to gains, which have since eroded as investors digest a flood of economic data. Investor concerns over Federal Reserve tapering of its stimulus measures have also flared up again Thursday, due to the drop in weekly jobless claims.
First-time claims for U.S. unemployment benefits fell by more than expected in the week ended August 10th, according to a report released by the Labor Department on Thursday, with jobless claims falling to their lowest level in almost six years.
The report said initial jobless claims fell to 320,000, a decrease of 15,000 from the previous week’s revised figure of 335,000. Economists had expected jobless claims to edge down to 330,000 from the 333,000 originally reported for the previous week.
Consumer prices in the U.S. rose in line with economist estimates in the month of July, the Labor Department revealed in a report on Thursday, with the modest price growth reflecting higher prices for shelter, gasoline, apparel, and food.
The Labor Department said its consumer price index rose by 0.2 percent in July following a 0.5 percent increase in June. The modest increase in prices matched economist estimates.
While the Federal Reserve Bank of New York released a report on Thursday showing that conditions for New York manufacturers continued to see modest improvement in the month of August, the index of regional manufacturing activity unexpectedly decreased compared to the previous month.
The New York Fed said its general business conditions index dipped to 8.2 in August from 9.5 in July. A positive reading indicates growth in regional manufacturing activity, but economists had expected the index to climb to a reading of 10.0.
With a steep drop in utilities output offsetting a jump in mining output, the Federal Reserve released a report on Thursday showing that U.S. industrial production came in unchanged in July.
The Federal Reserve said industrial production was unchanged in July after rising by a downwardly revised 0.2 percent in June. Economists had expected production to increase by 0.3 percent, matching the growth originally reported for the previous month.
After reporting a significant improvement in regional manufacturing activity in the previous month, the Federal Reserve Bank of Philadelphia released a report on Thursday showing that manufacturing activity expanded at a much slower than expected rate in the month of August.
The Philly Fed said its diffusion index of current activity dropped to 9.3 in August from 19.8 in July. While a positive reading indicates continued growth in regional manufacturing activity, economists had expected a more modest decrease to a reading of 15.0.
Homebuilder confidence in the U.S. has unexpectedly seen a continued improvement in the month of August, the National Association of Home Builders revealed in a report on Thursday, with the index of homebuilder confidence rising to its highest level in nearly eight years.
The report said the NAHB/Wells Fargo Housing Market Index rose to 59 in August from a downwardly revised 56 in July. Economists had expected the index to edge down to 56 from the 57 originally reported for the previous month.
St. Louis Federal Reserve Bank President James Bullard, who has supported bond purchases by the Fed, said Wednesday that ”caution is warranted in taking policy action based on forecasts alone.”
The dollar fell to an early low of $1.3301 against the Euro on Thursday, before rising to a high of $1.3204. The U.S. currency has since retreated to around $1.3250, nearly unchanged for the day.
The greenback dropped to nearly a 2-month low of $1.5593 against the pound sterling Thursday, but has since climbed back to around $1.5550.
British retail sales growth accelerated more-than-expected in July as the heatwave boosted food store sales, data showed Thursday. Including automotive fuel, retail sales volume advanced 1.1 percent from the prior month, following a 0.2 percent rise in June, the Office for National Statistics said. Sales grew for the third month and the rate of growth was expected to rise moderately to 0.7 percent.
Deflation in Japan is coming to an end and the job situation is improving, according to the latest monthly report from Japan’s Cabinet Office released on Thursday. The government kept its assessment of the overall economy unchanged, saying that the economy is picking up steadily and is showing some movements towards recovery.
“Recent price developments indicate that the deflation is ending,” the Cabinet Office said in the report. Upwardly revising its assessment of the job situation, the government said “the employment situation is improving.”
After overcoming some early weakness, the buck climbed to a week and a half high of Y98.641 against the Japanese Yen, but has since pulled back to around Y97.925.