The dollar fell versus its counterparts on Thursday. The 4-week moving average of US initial jobless claims decreased to the lowest level since May 8. The S&P 500 declined 4.60 to 1,101.53. The euro rose to $1.31 for the first time since May 4 as euro-area economic sentiment climbed to the highest level since March 2008. The yen strengthened to 86.79 against the dollar at 5:28 pm in NY, from 87.35 yesterday. The loonie rose against the greenback for the first time in three days on gains in oil and other commodities. The aussie also advanced.

The dollar index broke the 82-handle support. To reverse its downtrend, the index needs to break the 83-area resistance. There is support in the 81 area.

 

Financial and Economic News and Comments

US & Canada

US initial jobless claims in the week ending July 24 fell 11,000 to 457,000, in line with forecast, from the previous week's upwardly revised 468,000, according to figures from the Labor Department. The 4-week moving average declined 4,500 to 452,500, the lowest level since May 8. Continuing claims in the week ending July 17 rose 81,000 to 4,565,000 from the preceding week's downwardly revised 4,484,000. The 4-week moving average of those continuing claims fell 18,000 to 4,548,250. The insured unemployment rate for the week ending July 17 increased to 3.6% from the prior week's 3.5%.

 

Canada's industrial product prices unexpectedly fell 0.9% m/m in June, the largest fall since May 2009, after an upwardly revised 0.4% m/m advance in May, data from Statistics Canada showed. The June IPPI increased 0.2% y/y, a second consecutive year-on-year gain. Raw materials prices unexpectedly slid 0.3% m/m in June, a second straight monthly slide, following a revised 7.3% m/m May decrease. The June RMPI edged down 0.1% y/y, the first year-on-year decline since November 2009.

Europe

The eurozone economic sentiment index increased to a higher-than-expected 101.3 in July from an upwardly revised 99.0 in June, showing eurozone economic confidence improved for a second consecutive month to the highest level since March 2008, according to data from the European Commission. Consumer confidence increased to -14 in July from -17 in June; industrial confidence improved to -4 from -6; and confidence in the services sector advanced to 6 from 4. In a separate measure of business confidence released by the EC, the business climate indicator increased to 0.66 in July, a 16th straight monthly improvement, from an upwardly revised 0.40 in June.

 

Germany's unemployment fell as forecast a seasonally adjusted 20,000 in July, a 13th straight monthly decline, to 3.21 million, the lowest since November 2008, after falling a revised 20,000 in June, data from the Federal Labor Agency showed, suggesting the German labor market continues to improve amid a strengthening economy. The seasonally adjusted unemployment rate declined to 7.6% from June's 7.7%.

According to figures released by the Bank of England, total net lending to individuals increased by £0.6 billion ($0.94 billion) in June after a £1.1 billion rise in May. Net lending secured on dwellings was up by £0.7 billion, slightly below May's downwardly revised £0.8 billion increase. Mortgage approvals declined to a lower-thanexpected 47,643 in June from a downwardly revised 49,461 in May. Consumer credit unexpectedly declined by £0.1 billion in June, compared with a £0.3 billion increase a month earlier.

UK house prices fell a slightly-more-than-expected 0.5% m/m to an average of £169,347 ($264,325) in July, the first decline since February, after a downwardly revised 0.0% m/m in June, a report released by Nationwide Building Society showed. House prices rose 6.6% y/y, a 10th straight year-on-year rise but the smallest since December 2009, following June's 8.7% y/y gain.

 

Asia-Pacific

Japanese retail sales increased as forecast a seasonally adjusted 0.4% m/m in June, the fifth gain in six months, after a 2.0% m/m May decline that was the deepest in more than five years, according to data from the Ministry of Economy, Trade and Industry. Retail sales rose as expected 3.2% y/y to ¥11.004 trillion ($126.99 billion), a sixth successive year-on-year rise, following May's upwardly revised 2.9% y/y advance. Sales at large-scale retail stores slid 3.0% y/y to ¥1.564 trillion in June, a 27th straight year-on-year slide, after a revised 3.9% y/y May decrease.

 

FX Strategy Update

 
EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
AUD/USD
EUR/JPY

Primary Trend
Negative
Neutral
Negative
Positive
Negative
Neutral
Negative

Secondary Trend
Neutral
Negative
Positive
Negative
Neutral
Neutral
Negative

Outlook
Neutral
Neutral
Positive
Neutral
Positive
Neutral
Neutral

Action
None
Long
None
None
Long
None
None

Current
1.3076
86.79
1.5612
1.0414
1.0361
0.9001
113.49

Start Position
N/A
87.75
N/A
N/A
1.0247
N/A
N/A

Objective
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Stop
N/A
85.75
N/A
N/A
1.0075
N/A
N/A

Support
1.2550
86.00
1.5300
1.0400
1.0300
0.8750
107.50

1.2150
84.80
1.5000
1.0300
1.0200
0.8600
106.00

Resistance
1.3250
90.00
1.5700
1.0750
1.0600
0.9050
115.00

1.3500
92.00
1.6000
1.1000
1.0800
0.9250
120.00

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