Forexpros – The dollar held steady against most major global currencies on Thursday, jumping in and out of positive territory as investors digested conflicting economic indicators to determine if the U.S. economy was picking up its pace of recovery or not.
In Asian trading on Thursday, EUR/USD was up 0.04% at 1.2294.
Investors spent Thursday morning sifting through recently released indicators to determine if the economy will improve or remain soft, the latter of which could prompt Federal Reserve stimulus measures, which would weaken the greenback.
Later Thursday, the U.S. will release data on building permits and housing starts, which could provide good insight as to whether the Federal Reserve will stimulate the economy.
U.S. industrial production outpaced expectations in July, climbing 0.6%, above forecasts for a 0.5% increase.
However, the Federal Reserve Bank of New York said earlier that its general business conditions index fell by 13.2 points to -5.8 in August from a reading of 7.4 in July.
Markets were expecting a 6.5 reading, which suggested that many American business owners remain uncertain over the country’s future and are keeping capital spending and hiring at bay.
Inflation, meanwhile, did remain at bay last month.
Government data revealed that the U.S. consumer price index came in unchanged in July for the second consecutive month, compared with expectations for a 0.2% monthly rise, while core consumer prices, which exclude food and energy prices, rose 0.1%, less than the expected 0.2% increase.
The figures, however, came right in the heels of a U.S. Commerce Department report that retail sales jumped 0.8% in July after a 0.7% drop in June, shooting way past market expectations for a 0.3% increase.
It was the first gain in four months.
Core retail sales, which exclude automobiles, rose 0.8% in July, well above market calls for a 0.4% increase and up from a 0.8% decline in June.
Meanwhile, yields in U.S. government bond markets have been rising, a sign investors may be leaving the safety of the U.S. Treasury in search of risk.
The dollar weakens and stock prices rise when the Fed intervenes, and months of soft economic indicators have fueled market calls that the Fed will step in with quantitative easing.
Investors have been selling greenbacks and snapping up stocks in anticipation of Fed easing, yet stock indices may have risen to the point that the Fed may hold off intervening on the notion that anticipatory stock buying has already stimulated the economy in the same way actual intervention would, economists have said.
Very weak or very strong housing starts and building permits would provide the market with welcome clarity and more definitive steering currents.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.01% at 1.5683.
The dollar was up against the yen, with USD/JPY trading up 0.19% at 79.15, and down against the Swiss franc, with USD/CHF trading down 0.05% at 0.9768.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.09% at 0.9884, AUD/USD down 0.09% at 1.0495 and NZD/USD up 0.06% at 0.8078.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.01% at 82.58.
On top of releasing data on building permits and housing starts, the U.S. will publish weekly government data on unemployment claims.
The country is also to release a report on manufacturing activity in the Philadelphia area.
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