Forexpros – The U.S. dollar was higher against the euro on Thursday, as markets awaited the outcome of a German vote to approve the country’s part in Spain’s bank bailout, while a string of weak U.S. data fuelled concerns that the economic recovery is stalling.
During U.S. morning trade, the dollar was higher against the euro, with EUR/USD shedding 0.21% to trade at 1.2257.
The euro turned lower ahead of the vote in Berlin after German Finance Minister Wolfgang Schauble warned that Spain’s government should be ultimately responsible for European aid to its banks.
Earlier in the day, Spain saw borrowing costs rise sharply at an auction of government debt, fuelling fears that the country may need a full bailout.
Following the auction the yield on the country’s 10-year bonds was at 7.02%, breaching the critical 7% threshold, widely viewed as unsustainable in the long run.
In the U.S., reports showing that existing home sales fell unexpectedly in June, while jobless claims rose more-than-forecast last week fuelled concerns over the outlook for the economy.
The National Association of Realtors said that existing home sales fell by 5.4% to a seasonally adjusted 4.37 million units in June, defying expectations for a modest increase to 4.63 million units.
The data came after the U.S. Department of Labor said the number of people who filed for unemployment assistance last week rose by 34,000 to a seasonally adjusted 386,000, compared to expectations for an increase to 365,000.
The previous week’s figure was revised up to 352,000 from a previously reported 350,000.
A separate report showed that manufacturing activity in the Philadelphia-region contracted for the third consecutive month in July.
The greenback was lower against the pound, with GBP/USD up 0.36% to 1.5708.
Sterling remained supported as robust corporate earnings lifted equity markets and bolstered demand for higher-yielding assets.
In the U.K., official data showed that retail rose less-than-expected in June, inching up 0.1%, disappointing expectations for a 0.6% gain, as wet weather hurt demand for outdoor products.
Elsewhere, the greenback was lower against the yen, with USD/JPY down 0.19% to 78.64, but pushed higher against the Swiss franc, with USD/CHF rising 0.20% to 0.9797.
The greenback was broadly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD shedding 0.28% to trade at 1.0072, AUD/USD up 0.59% to 1.0422 and NZD/USD up 0.40% to hit 0.8033.
A report earlier showed that Canadian wholesale sales rose by 0.9% in May, easily beating expectations for a 0.2% increase and gaining for the fourth consecutive month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was little changed, inching up 0.01% to 83.11.
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