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Dollar Weakens After Dismal Economic Data

The U.S. dollar slipped against its key counterparts in the European session on Thursday, following the release of weak data on durable goods orders, Philadelphia manufacturing activity and weekly jobless claims that raised uncertainty about the economic outlook.

Data from the Commerce Department showed a smaller than expected increase in durable goods orders in January.

The report said durable goods orders surged up by 1.2 percent in December after jumping by an upwardly revised 1.0 percent in November.

Economists had expected durable goods orders to soar by 1.5 percent compared to the 0.7 percent increase that had been reported for the previous month.

The Labor Department report showed that first-time claims for unemployment benefits fell more than expected in the week ended February 16th.

The report said initial jobless claims dropped to 216,000, a decrease of 23,000 from the previous week's unrevised level of 239,000. Economists had expected jobless claims to dip to 229,000.

Data from the Philadelphia Federal Reserve unexpectedly showed a contraction in regional manufacturing activity in the month of February.

The Philly Fed said its index for current manufacturing activity in the region tumbled to a negative 4.1 in February from a positive 17.0 in January, with a negative reading indicating contraction. The index had been expected to slip to 14.0.

The currency was higher in the Asian session as the Fed's January meeting minutes showed division among the central bankers with regards to future rates policy.

There was consensus for completing the normalization of the size of the Federal Reserve's balance sheet despite rising global risks and concerns about trade tensions.

The greenback fell to 1.3094 against the pound, from a high of 1.3026 hit at 2:00 am ET. The greenback is likely to challenge support around the 1.32 level.

Reversing from an early 2-day high of 1.1321 against the euro, the greenback edged down to 1.1366. Next key support for the greenback is seen the 1.16 mark.

Data from Destatis showed that Germany's consumer price inflation slowed in January to its lowest level in nearly a year.

The consumer price index advanced 1.4 percent year-on-year in January, slower than the revised 1.6 percent increase in December.

After rising to a 2-day high of 1.0023 against the Swiss franc at 5:05 am ET, the greenback reversed direction with the pair trading at 1.0000. The greenback is poised to challenge support around the 0.99 level.

The greenback dropped to 110.56 against the yen, following an advance to 110.86 at 5:15 pm ET. The greenback is seen finding support around the 108.00 level.

The latest survey from Nikkei showed that Japan manufacturing sector slipped into contraction in February, with a 32-month low manufacturing PMI score of 48.5.

That's down from 50.3 in January, and it sinks beneath the boom-or-bust line of 50 that separates expansion from contraction.

The greenback was trading lower at 1.3169 against the loonie, down from a high of 1.3206 touched at 1:15 am ET. On the downside, 1.30 is possibly seen as the next support level for the greenback.

The greenback held steady against the kiwi, following a weekly high of 0.6805 set at 1:00 am ET. At yesterday's close, the pair was worth 0.6857.

The greenback climbed to a 6-day high of 0.7086 against the aussie, from an early more than 2-week low of 0.7207, and held steady thereafter. The pair finished yesterday's trading at 0.7164.

Data from the Australian Bureau of Statistics showed that Australia's unemployment rate came in at a seasonally adjusted 5.0 percent in January - unchanged and in line with expectations.

The Australian economy added 31,900 jobs last month - blowing away forecasts for an increase of 15,000 jobs following the gain of 16,900 jobs in December.

The U.S. existing home sales and leading indicator for January are scheduled for release at 10:00 am ET.

At 12:35 pm ET, the Bank of Canada Governor Stephen Poloz will deliver speech about monetary policy at the Chamber of Commerce of Metropolitan Montreal.

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