Dollar erases gains vs. euro, remains supported

The dollar erased gains against the euro on Thursday following better-than-forecast euro zone PMI data, but remained supported after July’s Federal Reserve minutes reinforced expectations that the bank is on track to start tapering this year.

During U.S. morning trade, the dollar retreated from one-week highs against the euro, with EUR/USD edging up 0.06% to 1.3362, after falling to lows of 1.3298.

Demand for the dollar continued to be underpinned after the minutes of the Fed’s July meeting showed that officials were "broadly comfortable" with plans to start unwinding the bank’s USD85 billion-a-month bond buying program.

However, officials remain divided over the timing of possible reduction, with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate. 

The minutes described recent U.S. economic data as “mixed”, indicating that plans to taper could be pushed back if the economy was to weaken.
Data on Thursday showed that U.S. initial jobless claims rose more-than-expected last week, but remained close to six-year lows.

The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose by 13,000 to a seasonally adjusted 336,000, slightly higher than forecasts for 330,000.

The euro remained supported after data showed that manufacturing activity in the euro zone expanded at the fastest pace in 26 months in August.

The flash euro zone manufacturing purchasing managers’ index rose to 51.3 from a final reading of 50.3 in July. Analysts had expected the index to inch up to 50.8.

The flash euro zone services PMI rose to a 24-month high of 51.0 from 49.8 in July, better than expectations for a reading of 50.2.

The dollar was trading close to three-week highs against the yen, withUSD/JPY up 0.88% to 98.54, off session highs of 98.81.

The yen extended losses against the dollar earlier after the upbeat euro zone data bolstered the outlook for the economic recovery in the region, dampening safe haven demand.

The dollar trimmed gains against the pound and the Swiss franc, withGBP/USD down 0.46% to 1.5589 and USD/CHF climbing 0.16% to trade at 0.9238.

Elsewhere, the greenback was broadly higher against its Australian, New Zealand and Canadian counterparts, with AUD/USD up 0.57% to 0.9020,NZD/USD slipping 0.11% to 0.7837 and USD/CAD advancing 0.39% to 1.0512.

The growth linked Australian dollar was boosted earlier Thursday after economic data out of China eased concerns over a slowdown in the world’s second largest economy.

The preliminary reading of China’s HSBC manufacturing PMI rose to a four-month high of 50.1 in August, up from 47.7 in July. Economists had forecast a reading of 48.3.

In Canada, official data showed that retail sales unexpectedly fell by 0.6% in June, while core retail sales were down 0.8%, confounding expectations for a 0.1% increase.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.17% to 81.49.

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Forex - Euro trims losses against dollar

The euro trimmed losses against the dollar on Thursday, as better-than-forecast euro zone data buoyed the single currency, but the dollar remained supported after July’s Federal Reserve minutes indicated that the bank is on track to start tapering this year.

EUR/USD pulled back from 1.3298, the lowest since August 15, to hit 1.3341 during U.S. morning trade, still down 0.11% for the day.

The pair was likely to find support at 1.3250 and resistance at 1.3363, the session high.

The dollar remained broadly stronger after Wednesday’s minutes of the Fed’s July meeting showed that officials were "broadly comfortable" with plans to start unwinding the bank’s USD85 billion-a-month bond buying program.

However, officials remain divided over the timing of possible reduction, with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate. 

The minutes described recent U.S. economic data as “mixed”, indicating that plans to taper could be pushed back if the economy was to weaken.

Data on Thursday showed that U.S. initial jobless claims rose more-than-expected last week, but remained close to six-year lows.

The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose by 13,000 to a seasonally adjusted 336,000, slightly higher than forecasts for 330,000.

The single currency remained supported above the 1.33 level after data showed that manufacturing activity in the euro zone expanded at the fastest pace in 26 months in August.

The flash euro zone manufacturing purchasing managers’ index rose to 51.3 from a final reading of 50.3 in July. Analysts had expected the index to inch up to 50.8.

Meanwhile, the flash euro zone services PMI rose to a 24-month high of 51.0 from 49.8 in July, better than expectations for a reading of 50.2.

Germany’s manufacturing PMI rose to a 25 month high of 52.0, while the country’s services PMI rose to a six-month high of 52.4.

This offset data showing that the French manufacturing PMI remained unchanged at 49.7 in August, while the French services PMI declined to a two-month low of 47.7.

Elsewhere, the euro was higher against the pound, with EUR/GBP up 0.35% to 0.8557 and was close to session highs against the yen, withEUR/JPY advancing 0.85% to 131.55.

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Gold futures spike to session high after U.S. jobless claims data

Gold futures reversed earlier losses to hit the highest levels of the session on Thursday, after data showed that the number of people who filed for unemployment assistance in the U.S. rose more-than-expected last week.

Prices came under pressure earlier in the day after the minutes of the Federal Reserve’s July meeting indicated support for tapering.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,375.10 a troy ounce during U.S. morning hours, up 0.35%.

Futures held in a range between USD1,354.80 a troy ounce, the daily low and a session high of USD1,376.10 a troy ounce.

The December contract settled down 0.2% at USD1,370.10 a troy ounce on Wednesday. 

Gold futures were likely to find support at USD1,318.10 a troy ounce, the low from August 15 and resistance at USD1,384.00, the high from August 19.

Gold prices rose to the highest levels of the day after the U.S. Department of Labor said the number of individuals filing for initial jobless rose by 13,000 to a seasonally adjusted 336,000 last week.

Jobless claims for the preceding week were revised up to a gain of 323,000, from a previously reported 320,000.

Analysts had expected U.S. jobless claims to rise by 7,000 to 330,000 last week.

Market participants have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

The minutes of the central bank’s July meeting showed that Fed officials were "broadly comfortable" with plans to scale back the bank’s USD85 billion-a-month stimulus program.

However, policymakers remain divided over the timing of possible reduction, with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate. 

The minutes described recent U.S. economic data as “mixed”, indicating that plans to taper could be pushed back if the economy was to weaken.

The central bank is scheduled to meet September 17-18 to review the economy and assess policy.

The precious metal is on track to post a loss of approximately 19% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.

Elsewhere on the Comex, silver for September delivery rose 1.1% to trade at USD23.21 a troy ounce, while copper for September delivery rallied 1.8% to trade at USD3.366 a pound. 

Copper futures rallied sharply as the release of unexpectedly strong manufacturing data out of the euro zone and China boosted demand expectations for the industrial metal.  

The preliminary reading of China’s HSBC manufacturing purchasing managers’ index rose to a four-month high of 50.1 in August, up from 47.7 in July. Economists had forecast a reading of 48.3. 

The measure climbed above the 50.0-mark for the first time since April, indicating expansion in manufacturing activity.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year and manufacturing numbers are often used as indicators for future demand growth.

Meanwhile, data out of the euro zone fuelled optimism over the region’s economic outlook.

The flash euro zone manufacturing purchasing managers’ index rose to 51.3 in August from a final reading of 50.3 in July. Analysts had expected the index to inch up to 50.8.

Germany’s manufacturing PMI rose to a 25 month high of 52.0, while the services PMI rose to a six-month high of 52.4.

Europe as a region is third in global demand for the industrial metal.

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Dollar off highs after rise in U.S. jobless claims

The dollar came off highs against the other major currencies on Thursday after data showing that U.S. initial jobless claims rose more-than-expected last week sparked profit taking following the dollar’s gains earlier in the session.

During European afternoon trade, the dollar pulled away from one-week highs against the euro, with EUR/USD down 0.12% to 1.3339, after falling as low as 1.3298.

The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose by 13,000 to a seasonally adjusted 336,000. Analysts had expected U.S. jobless claims to rise by 7,000 to 330,000.

The dollar remained broadly stronger after the minutes of the Federal Reserve’s July meeting indicated that the bank is on track to start unwinding its stimulus program later this year.

However, officials remain divided over the timing of possible reduction, with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate. 

The euro briefly touched session highs earlier after data showed that manufacturing activity in the euro zone expanded at the fastest pace in 26 months in August.

The flash euro zone manufacturing purchasing managers’ index rose to 51.3 from a final reading of 50.3 in July. Analysts had expected the index to inch up to 50.8.

The flash euro zone services PMI rose to a 24-month high of 51.0 from 49.8 in July, better than expectations for a reading of 50.2.

The dollar came off three-week highs against the yen, with USD/JPY up 0.82% to 98.50 off session highs of 98.81.

The yen extended losses against the dollar earlier after the upbeat euro zone data bolstered the outlook for the economic recovery in the region, dampening safe haven demand.

The dollar also pared gains against the pound and the Swiss franc, withGBP/USD down 0.44% to 1.5591 and USD/CHF climbing 0.33% to trade at 0.9254.

Elsewhere, the greenback was broadly higher against its Australian, New Zealand and Canadian counterparts, with AUD/USD up 0.43% to 0.9008,NZD/USD losing 0.28% to trade at 0.7826 and USD/CAD advancing 0.30% to 1.0502.

The growth linked Australian dollar was boosted earlier Thursday after economic data out of China eased concerns over a slowdown in the world’s second largest economy.

The preliminary reading of China’s HSBC manufacturing PMI rose to a four-month high of 50.1 in August, up from 47.7 in July. Economists had forecast a reading of 48.3.

In Canada, official data showed that retail sales unexpectedly fell by 0.6% in June, while core retail sales were down 0.8%, confounding expectations for a 0.1% increase.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.26% to 81.57.

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U.S. initial jobless claims rise by 13,000 to 336,000 last week

The number of people who filed for unemployment assistance in the U.S. rose more-than-expected last week, after hitting the lowest level since October 2007 in the preceding week, official data showed on Thursday. 

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 17 rose by 13,000 to a seasonally adjusted 336,000.

Jobless claims for the preceding week were revised up to a gain of 323,000, from a previously reported 320,000.

Analysts had expected U.S. jobless claims to rise by 7,000 to 330,000 last week.

Continuing jobless claims in the week ended August 10 rose to 2.999 million. Analysts had expected continuing claims to decline to 2.960 million from last week’s figure of 2.970 million.

The four-week moving average was 330,500, a decline of 2,250 from the previous week's revised average of 332,750.

The monthly average is seen as a more accurate gauge of labor trends because it reduces volatility in the week-to-week data.

Following the release of the data, the U.S. dollar trimmed gains against the euro, with EUR/USD shedding 0.2% to trade at 1.3328.

Meanwhile, the outlook for U.S. equity markets remained higher. The Dow Jones Industrial Average futures indicated a gain of 0.3% at the open, S&P 500 futures pointed to a rise of 0.35% and Nasdaq 100 futures indicated an increase of 0.55%.

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Forex - GBP/USD at 1-week lows ahead of U.S. data

The pound fell to one-week lows against the stronger dollar on Thursday after the minutes from the Federal Reserve’s latest meeting indicated that the bank is on track to start scaling back stimulus later this year.

GBP/USD hit 1.5562 during European afternoon trade, the lowest since August 15; the pair subsequently consolidated at 1.5582, shedding 0.50%.

Cable is likely to find support at 1.5530 and resistance at 1.5650, the high of August 15.

The dollar rallied against the other major currencies after the minutes of the Fed’s July meeting showed that officials were "broadly comfortable" with plans to start unwinding the bank’s USD85 billion-a-month bond buying program.

However, officials remain divided over the timing of possible reduction, with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate. 

The minutes described recent U.S. economic data as “mixed”, indicating that plans to taper could be pushed back if the economy was to weaken.

Elsewhere, sterling pulled back from session lows against the euro, withEUR/GBP up 0.22% to 0.8546, down from highs of 0.8574.

The single currency hit session highs against the pound, dollar and yen earlier after data showed that manufacturing activity in the euro zone expanded at the fastest pace in 26 months in August.

The flash euro zone manufacturing purchasing managers’ index rose to 51.3 from a final reading of 50.3 in July. Analysts had expected the index to inch up to 50.8.

Meanwhile, the flash euro zone services PMI rose to a 24-month high of 51.0 from 49.8 in July, better than expectations for a reading of 50.2.

Germany’s manufacturing PMI rose to a 25 month high of 52.0, while the country’s services PMI rose to a six-month high of 52.4.

Investors were looking ahead to U.S. data on initial jobless claims later in the trading day.

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Forex - EUR/USD lower but euro zone data supports

The euro was lower against the broadly stronger dollar on Thursday, following the minutes of the Federal Reserve’s latest meeting, but the euro’s losses were held in check by better-than-expected euro zone PMI data.

EUR/USD hit 1.3298 during European afternoon trade, the lowest since August 15; the pair subsequently consolidated at 1.3311, shedding 0.33%.

The pair was likely to find support at 1.3250 and resistance at 1.3363, the session high.

The dollar strengthened after the minutes of the Fed’s July meeting showed that officials were "broadly comfortable" with plans to start unwinding the bank’s USD85 billion-a-month bond buying program.

However, officials remain divided over the timing of possible reduction, with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate. 

The minutes described recent U.S. economic data as “mixed”, indicating that plans to taper could be pushed back if the economy was to weaken.

The single currency remained supported above the 1.33 level after data showed that manufacturing activity in the euro zone expanded at the fastest pace in 26 months in August.

The flash euro zone manufacturing purchasing managers’ index rose to 51.3 from a final reading of 50.3 in July. Analysts had expected the index to inch up to 50.8.

Meanwhile, the flash euro zone services PMI rose to a 24-month high of 51.0 from 49.8 in July, better than expectations for a reading of 50.2.

Germany’s manufacturing PMI rose to a 25 month high of 52.0, while the country’s services PMI rose to a six-month high of 52.4.

This offset data showing that the French manufacturing PMI remained unchanged at 49.7 in August, while the French services PMI declined to a two-month low of 47.7.

Elsewhere, the single currency was higher against the pound and the yen, with EUR/GBP rising 0.22% to 0.8546 and EUR/JPY climbing 0.66% to 131.29.

Investors were looking ahead to U.S. data on initial jobless claims later in the trading day.

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