The dollar paused versus other majors on Thursday, as Wall Street braced for a slew of economic data including the latest on the sluggish jobs market.
Earlier this week the dollar tumbled to its lowest in two months versus the euro and sterling, as its European counterparts were supported by successful bond sales and talk of inflation across the Atlantic.
Eurozone inflation rate could temporarily increase further in the next few months, reflecting commodity price developments, the European Central Bank said Thursday.
In its latest monthly bulletin, the ECB said inflation rate is likely to stay slightly above its 2% target in the near-term before moderating again towards the end of the year.
The buck was stable this morning, but has been able to pare only a small fraction of its recent losses.
Choppy trading left the dollar at $1.35 versus the euro, near an 8-week low of of $1.3537 set on Wednesday. Less than two weeks ago, the dollar was at a 4-month peak of $1.2873, but has since drifted gradually lower.
The Financial Times Deutschland reported Euro zone nations may allow Greece and Ireland to write off some of their debt burden using the European Financial Stability Facility (EFSF).
Meanwhile, the dollar was stuck near $1.60 against the sterling compared to a 2-month low of $1.6059 on Tuesday.
The dollar edged slightly higher versus its Canadian counterpart, coming within a hair of parity.
There was little movement against the yen this morning, with the buck holding at Y82.25. The dollar has lost ground over the past week, dropping toward November’s 15-year low of Y80.22.
In economic news from Asia, China’s economy was full steam ahead in the fourth quarter, raising speculation of further monetary tightening measures from Beijing.
Earlier today, China said its gross domestic product expanded 9.8% in the fourth quarter from a year earlier, faster than the third quarter’s 9.6% increase.
Looking at today’s economic calendar from the US, the Labor Department will release its customary jobless claims report for the week ended January 15th at 8:30 a.m. ET. Economists expect claims have declined to 420,000 from 445,000 reported for the previous week.
At 10.00 a.m. ET, the National Association of Realtors is scheduled to release its report on existing home sales for December.
Economists estimate existing home sales of 4.90 million for the month, slightly higher than a seasonally adjusted annual rate of 4.68 million units reported for the previous month.
The Conference Board will release a report on the U.S. leading index for December at 10.00 a.m.ET. The consensus estimate calls for a 0.6% increase in the leading indicators index for the month.
The results of the Philadelphia Federal Reserve’s manufacturing survey are due out at 10.00 a.m. ET. Economists expect the diffusion index of current activity to show a reading of 20 for January.