Dollar Shows Mixed Trading Against Majors
In European deals on Thursday, the dollar showed mixed trading against its major counterparts as investors look forward to the U.S. advance third quarter GDP reading along with jobless claims report to gauge the health of the world’s biggest economy.
While the dollar recovered from a 9-day low against the yen, it pared Asian session gains against the European majors. The dollar thus fell from new multi-week highs against the euro and the franc.
The Bureau of Economic Analysis is due to release its advance third quarter GDP report at 8:30 am ET. The report is likely to show that the U.S. economy contracted at a 3.2% rate in the quarter.
The U.S. economy shrank at a 0.7% rate in the second quarter, revised from its previous estimate of 1% growth, but smaller than the 6.4% contraction in the first quarter. Economists had expected a sharper 1.4% GDP decline for the second quarter.
The U.S. Labor Department is due to release its customary weekly jobless claims report for the week ended October 24th at 8:30 am ET. Economists expect claims to have declined to 525,000 in the recent reporting week.
A solid reading could help foster some renewed optimism about the global economy, but sentiment stayed shaky after a slew of recent weak U.S. data and sharp falls on equity markets that has sparked steep gains for the dollar and the yen.
Quarterly results Exxon Mobil (XOM), Procter & Gamble (PG), Sprint (S) and Symantec (S), among others, are also likely to be in focus.
Oil prices steadied at above $77 a barrel today, pausing from the previous session’s decline of 2.6 percent, as investors waited for more economic data to gauge the pace of economic recovery in the United States.
Concerns over the fragile health of the U.S. economy and weakness in energy demand have prompted oil prices to fall about 6 percent over five out of six trading sessions, since striking a one-year high of $82 on October 21.
U.S. crude for December delivery slipped 6 cents to $77.40 a barrel at 4:05 am ET, after settling down $2.09 at $77.46 on Wednesday on government data that showed a surprise build in U.S. gasoline inventories last week.
London Brent crude edged up 5 cents to $75.91.
During European deals on Thursday, the dollar pared its Asian session gains against the euro and the franc. At present, the dollar is worth 1.4760 against the euro and 1.0235 against the franc, fell from new multi-week highs of 1.4685 and 1.0289, respectively. The near term support for the dollar is seen at 1.020 against the franc and 1.482 against the euro. The euro-dollar and the dollar-franc pairs were worth 1.4708 and 1.0274, respectively at yesterday’s close.
German jobless rate unexpectedly dropped in October, data released by the Federal Labor Agency showed today. The jobless rate fell to 8.1% in October from 8.2% in September, while economists had forecast the rate to rise to 8.3%. The number of unemployed declined 26,000 after a revised fall of 15,000 in the previous month. The number was expected to rise by 15,000.
Against the currency of U.K., the dollar is currently trading at 1.6445, slipped from an Asian session high of 1.6341. If the dollar weakens further, it may target the 1.647 level. At yesterday’s close, the pound-dollar pair was quoted at 1.6377.
The dollar strengthened against the yen after touching a 9-day low of 90.26 at 1:00 am ET Thursday. As of now, the dollar-yen pair is trading near yesterday’s close of 90.71.The next upside target level for the pair is seen at 91.4.
Industrial output in Japan was up 1.4 percent on month in September, the Ministry of Economy, Trade and Industry said today, posting an index score of 85.1. The reading marked the seventh straight month of gain and also came in above expectations for a 1.0 percent increase following the 1.6 gain in August.
On an annual basis, output was down 18.9 percent compared to forecasts for a 19.3 percent decline after the 19.0 percent contraction in the previous month.
