The dollar has pulled back in comparison to its major European competitors on Thursday, but has continued to gain ground against the Japanese Yen. There has been little in the way of major news released during today's session. Investor sentiment continued to be impacted by yesterday's mixed U.S. economic results. Investors are now of the opinion that the U.S. is unlikely to proceed with further economic stimulus, at least in the near term.
China's Premier Wen Jiabao has said that the economy is still under pressure, despite some positive signs in some sectors, the official Xinhua News Agency reported Wednesday.
During a two-day inspection tour to Zhejiang Province, he said the foundation for stable economic growth is still fragile and the economic hardships may continue for some more time.
The dollar had been gaining ground versus the Euro for the past 2 sessions and reached a 4-day high of $1.2255 Thursday morning. The U.S. currency has since pulled back sharply, to around $1.2355.
Eurozone annual inflation remained stable at 2.4 percent in July, final data from Eurostat showed Thursday. The rate also matched flash estimate. On a monthly basis, consumer prices were down 0.5 percent in July.
Employment in Germany increased further in the second quarter, though at a slower pace compared to the preceding quarter, preliminary data from the Federal Statistical Office showed Thursday. The number of persons in employment, whose place of employment is in Germany, increased 1.3 percent on an annual basis to 41.587 million in the second quarter, slightly slower than the 1.4 percent gain recorded in the first quarter.
Unemployment in the U.K. will likely rise further later this year and in 2013 due mainly to prolonged weakness in the economy and subdued business confidence, IHS Global Insight Chief UK and European Economist Howard Archer said Wednesday.
Unemployment is headed higher later this year and will rise further in 2013 as a consequence of extended soft economic activity, heightened business caution, and public-sector jobs being pared substantially, the economist added.
The buck reached a 4-session high of $1.5635 versus the pound sterling Thursday morning, but has since retreated to over a 2-week low of $1.5744.
U.K. retail sales expanded unexpectedly in July driven by promotions and discounting, the Office for National Statistics revealed Thursday. Further, the upward revision to June's retail sales boosted hopes that the economy contracted less than initially estimated in the second quarter.
Retail sales grew 0.3 percent in July from a month ago, confounding expectations for a 0.1 percent fall. In June, sales climbed a solid 0.8 percent, which was revised up from 0.1 percent.
The greenback has been gaining ground versus the Japanese Yen since the beginning of the trading week, a move which has brought the currency from around the Y78.200 level, to over a one-month high of Y79.396 on Thursday.
New housing construction in the U.S. dipped more than expected in July, but a much stronger than expected jump in building permits offers hopes for the future of the beleaguered housing market. According to figures released Thursday by the Commerce Department, new privately-owned housing starts came in at a seasonally adjusted annual rate of 746,000 in July, a 1.1 percent drop from the revised June estimate of 754,000.
Economists had predicted a drop in housing starts following the rebound in June, but most had expected starts to come in at a somewhat higher annual rate of 750,000.
Initial claims for U.S. unemployment insurance came in slightly higher than anticipated in the week ended August 11th, according to a report released by the Labor Department on Thursday, although claims appear to have stabilized following recent volatility.
The report showed that initial jobless claims crept up to 366,000 from the previous week's revised figure of 364,000. Economists had expected jobless claims to climb to 365,000 from the 361,000 originally reported for the previous week.
Philadelphia-area manufacturing firms have continued to report weak business conditions in the month of August, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.
The Philly Fed said its diffusion index of current activity rose to a negative 7.1 in August from a negative 12.9 in July, although a negative reading continues to indicate a contraction in regional manufacturing activity. Economists had expected the index to climb to a negative 5.0.
by RTT Staff Writer
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