Forexpros – The euro traded slightly lower against the dollar on Thursday as investors digested U.S. data, which painted a mixed picture of the U.S. economy.
In Asian trading on Thursday, EUR/USD was trading down 0.01% at 1.2289, up from a low of 1.2288 and off from a high of 1.2291.
The pair was likely to find support at 1.2264, the low from Aug. 15, and resistance at 1.2306, the high from July 30.
Investors spent the morning digesting data out of the U.S., which painted contrasting views of the world’s largest economy, which kept the pair in a tight trading range.
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 to 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.
A separate report showed that U.S. producer prices rose at their fastest clip in five months in July, climbing 0.3% after a 0.1% increase the previous month.
Markets were expecting a 0.2% increase.
Furthermore, 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.
Talk the Federal Reserve may hold off on stimulating the economy with a new round of quantitative easing bolstered the dollar against its European counterpart.
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 a Fed movement for a good part of this year, and stock indices may have risen to the point that the Fed will hold off intervening on the notion that anticipatory stock buying has stimulated the economy in the same way actual intervention would.
In Europe this week, Germany reported that its gross domestic product expanded by 0.3% in the second quarter, better than expectations for 0.2% growth.
France, meanwhile, reported that its economy came in flat, beating expectations for a 0.1% contraction.
However, the eurozone economy as a whole contracted by 0.2% in the second quarter, in line with expectations and bringing the annualized rate of contraction to 0.4%.
The euro, meanwhile, was up against the pound and flat against the yen, with EUR/GBP up 0.03% at 0.7838, and EUR/JPY trading unchanged at 97.08.
Later Thursday, the eurozone will release data on consumer price inflation.
The U.S. will unveil data on building permits and housing starts, key gauges for the construction and housing sectors, as well as 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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