Dollar Slouches Ahead Of Data Storm
The U.S. dollar slipped lower against other major currencies early Thursday, ahead of a parade of data that could sound a weak tone.
The ICE dollar index , which tracks the unit against six major rivals, fell to 81.486, down from 81.710 late Wednesday in North America, accelerating its losses from the previous day’s relatively mild drop.
The WSJ Dollar Index , which uses a slightly wider comparison basket than the ICE index, slid to 73.71 from late Wednesday’s 73.93.
The moves came ahead of a wide slate of U.S. economic data, including weekly jobless claims, consumer inflation and industrial production for July, and the Empire State and Philly Fed reports gauging conditions in two key northeastern regions.
“Of these releases we believe that the Empire and Philly Fed surveys will be the most important because they are the most up-to-date measures of how the U.S. economy is doing,” BK Asset Management managing director Kathy Lien said in a note Wednesday.
“If manufacturing activity slows like some economists expect, U.S. yields could retreat further, dragging down the dollar,” she said.
Economists surveyed by MarketWatch see the Philly Fed index falling to 15.0 from the previous month’s 19.8 reading. The Empire State index is projected to hold steady at July’s 9.5 reading, which had marked a sharp pickup for the New York region after the index printed at 7.8 in June.
The Empire State index is due out from the New York Federal Reserve at 8:30 a.m. U.S. Eastern time, while the Philly Fed is slated for release at 10 a.m. Eastern.
The dollar’s decline sent the euro up to 1.3298 from Wednesday’s $1.3257, and the British pound improving to $1.5529 from $1.5509.
The pound’s gain extended a strong showing for sterling during the previous day in reaction to a forecast-topping read on British unemployment.
“U.K. employment came in better than expected, suggesting that Bank of England Gov. [Mark] Carney’s 7.0% unemployment threshold for potential tightening action … could be reached sooner than anticipated,” wrote CMC Markets senior market analyst Colin Cieszynski.
The dollar also fell against the top Asian currencies, easing to 97.72 Japanese yen from ¥98.02, while the Australian dollar rose to 91.79 U.S. cents from 91.40 cents.
Source : Marketwatch
