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Forex - Dollar holds steady, focus turns to Friday inflation data

Published 10/08/2017, 15:50
Updated 10/08/2017, 15:56
Dollar little changed vs. rivals after U.S. data disappoints

Dollar little changed vs. rivals after U.S. data disappoints

Investing.com - The dollar held steady against the other major currencies on Thursday, as the release of disappointing U.S. producer price inflation and jobless claims reports continued to weigh and as investors turned their attention to additional U.S. inflation data due on Friday.

The U.S. Commerce Department said producer price inflation and its core reading both unexpectedly declined last month.

In addition, the U.S. Department of Labor said initial jobless claims increased unexpectedly in the week ending August 5.

The reports came after a series of upbeat U.S. employment reports had fueled expectations the Federal Reserve will stick to its plans for a third interest rate hike this year.

USD/JPY slid 0.60% to 109.41, just off Wednesday’s two-month low of 109.56, while USD/CHF held steady at 0.9634.

Both the yen and the Swissie lost some steam but remained supported as heightened tensions between the U.S. and North Korea have sparked a flight to safety.

North Korea's state media said on Thursday that Pyongyang will develop a plan by mid-August to launch intermediate-range missiles at the U.S. territory of Guam.

The comments came after U.S. President Donald Trump said earlier in the week that North Korea would be "met with fire and fury" if it continued its threats.

The euro was little changed against the Swiss franc after losing 1.02% on Wednesday, marking the largest one day change since the Swiss National Bank shocked markets when it scrapped its currency peg with the euro in January 2015.

Elsewhere, EUR/USD was little changed at 1.1750, while GBP/USD slipped 0.12% to 1.2990.

The pound was unfazed by data earlier showing that U.K. manufacturing production was unchanged in June, though industrial output registered a larger than expected increase.

The Australian dollar was almost unchanged, with AUD/USD at 0.7887, while NZD/USD tumbled 1.19% to 0.7279.

In a widely expected move, the Reserve Bank of New Zealand left interest rates unchanged at 1.75% on Thursday, but added that it still expects inflation to rise gradually.

RBNZ Governor Graeme Wheeler said monetary policy would remain accommodative for a while and that the Kiwi had risen since the last monetary policy statement in May partly in response to a weaker U.S. dollar.

Wheeler added that a lower New Zealand dollar would help increase inflation and achieve more balanced growth.

Meanwhile, USD/CAD held steady at 1.2703, after hitting a three-week high of 1.2735 earlier in the day.

Statistics Canada reported on Thursday that the new housing price index rose 0.2% in June, confounding expectations for an uptick of 0.4%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 93.38, off the session’s high but still close to the more than one-week peak of 93.77 hit on Wednesday.

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