The U.S. dollar started off on a weak note on Thursday and stayed weak right through the session as a disappointing batch of economic data raised prospects for more interest rate cuts by the Federal Reserve.
Data on industrial production, housing starts and Philadelphia area manufacturing activity, all fell short of expectations.
A report from the Federal Reserve showed a bigger than expected decrease in industrial production, with the strike at General Motors (GM) contributing to a drop in manufacturing output.
The Fed said industrial production fell by 0.4% in September after climbing by an upwardly revised 0.8% in August. Economists had expected production to edge down by 0.1% compared to the 0.6% increase originally reported for the previous month.
Data from the Commerce Department said housing starts plunged by 9.4% to an annual rate of 1.256 million in September after soaring by 15.1% to a revised 1.386 million in August. Economists had expected housing starts to drop by 3.2% to an annual rate of 1.320 million from the 1.364 million originally reported for the previous month.
The report said building permits also slumped by 2.7% to an annual rate of 1.387 million in September after jumping by 8.2% to a revised 1.425 million in August. Building permits had been expected to tumble by 4.9% to a rate of 1.350 million from the 1.419 million originally reported for the previous month.
First-time claims for U.S. unemployment benefits edged up to 214,000, an increase of 4,000 from the previous week’s unrevised level of 210,000, data from Labor Department showed. Economists had expected jobless claims to inch up to 215,000.
The dollar index, which declined to 97.50, was last seen at 97.61, down 0.4% from previous close.
The Euro was up nearly 0.5%, with a unit of euro fetching $1.1126, compared to $1.1072 overnight.
The Sterling rose sharply in early European trades after the U.K. and the European Union negotiators agreed on a Brexit deal. However, after rising to $1.2987, the currency retreated to $1.2749 amid doubts about the deal getting the required approval from the U.K. lawmakers. The sterling was last seen moving around $1.2890, up nearly 0.5%.
Already, the Democratic Unionist Party, which is a key ally of Johnson’s government, confirmed in a statement Thursday that it is unable to back the proposals in the Commons as they are not in the best interests of Northern Ireland.
Against the Yen, the dollar was slightly higher, with the Japanese currency trading at 108.63 a dollar, down 0.11% from previous close.
The Swiss franc was up more than 0.75% with the dollar-franc pair at 0.9877. Strong retail sales data lifted the Swiss currency higher.
The dollar was down by about 0.5% against the loonie at 1.3135 and down more than 1% against the Aussie at 0.6829.
The material has been provided by InstaForex Company – www.instaforex.com