The dollar wavered on Thursday, unable to extend a monthly high set earlier this week despite mounting concerns that Europe’s sovereign debt crisis will derail the global economic recovery.
A pair of encouraging U.S. economic reports gave the dollar little support, as traders continued to focus on European borrowing costs.
An auction of Spanish 10-year debt saw borrowing costs rise to a euro-era record, an Italian yields stayed near unsustainable levels.
France was also watched amid fears that it may lose its triple A rating due to exposure to its debt-ridden neighbors.
The dollar was near its highs of the session at $1.3465 after easing below $1.3530 in early dealing. With the afternoon advance, the dollar stayed near a monthly high of $1.3411.
Euro zone construction output increased 0.4 percent on an annual basis in September, slower than August’s 1.9 percent growth, which was revised down from 2.5 percent. In July, the rate of growth was 2.7 percent.
The dollar also steadied versus the sterling, holding at $1.5760.
U.K. retail sales increased unexpectedly in October driven by pre-Christmas sales and store promotions, the Office for National Statistics said Thursday.
Sales volume including auto fuel logged a monthly growth of 0.6 percent, while economists were expecting a 0.2 percent drop. Annually, it advanced 0.9 percent compared to a 0.1 percent drop forecast by economists.
First-time claims for U.S. unemployment benefits unexpectedly showed a modest decrease in the week ended November 12th, the Labor Department revealed in a report on Thursday, with claims falling further below the key 400,000 level.
The report showed that initial jobless claims fell to 388,000 from the previous week’s revised figure of 393,000. Economists had expected jobless claims to edge up to 395,000 from the 390,000 originally reported for the previous week.
New housing starts in the U.S. declined slightly in October but still came in higher than most economists had predicted.
According to figures released Thursday by the Commerce Department, new housing starts came in at a seasonally adjusted annual rate of 628,000.
Most of the day’s economic news was positive, but the Philadelphia-area manufacturing activity has expanded at a slower rate in the month of November, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday, with the index of regional manufacturing activity showing an unexpected decrease.