The dollar saw uncertain movement in early afternoon trading Thursday in New York, inching up against the euro and the pound. Against the yen, the buck continued to linger just below the 100 mark.
The lack of conviction came as traders digested a mixed U.S. unemployment report and disappointing housing data that showed housing starts coming in below expectations.
Meanwhile, news from overseas economies continued to be poor, with larger than expected declines in industrial output in the Eurozone, while an official from the Bank of England indicated that British monetary policy adjusted to combat the recession is likely to boost demand, raising inflation concerns. With no significant economic data on tap in Japan, traders were largely left to consider the U.S. data.
The dollar added to its recent gains against the Eurozone currency, reaching a level of 1.3189, up from midnight's quote of 1.3226. With the move, the buck has recouped most of Monday's losses against the euro, setting a multi-day high of 1.3129 against the currency earlier in the day. In recent trading, the buck has hovered near a multi-week high of 1.3102 posted late last week.
Data from Eurostat confirmed euro area annual inflation at 0.6 percent in March, which was the lowest rate since the launch of the euro ten years ago. Consumer price inflation eased from February's 1.2 percent and 3.6 percent in the year-ago period.
Wednesday, a Governing Council member of the European Central Bank, Axel Weber said there is still a little room to cut the main refinancing rate, but he said it should not go below 1 percent. In a speech in Hamburg, Weber said if the interest rate falls below 1 percent, banks would have no incentive to lend to each other, paralyzing interbank lending.
A separate report released Thursday showed that European industrial output fell 18.4 percent year-on-year in February after falling by a revised 16 percent in January. The decline was slightly quicker than the expected fall of 18 percent. Output was down 2.3 percent month-on-month following a revised 2.4 percent decline in January, while economists had expected a 2.5 percent fall for February.
Against the pound, the buck ceded considerable ground just past midnight, falling to a fresh multi-week low of 1.5070. The greenback recouped its early losses later in the morning, reaching a level of 1.4899 in the early afternoon. Earlier, a Bank of England official commented on the effects of recent changes in U.K. monetary policy.
The substantial cuts in U.K. interest rates and more quantitative easing are likely to have a significant impact on demand in the British economy, Bank of England monetary policy member-designate David Miles said in an interview with the Western Mail newspaper.
The boost in demand in tandem with quantitative easing is likely to cause higher spending, which has been the primary fear of inflation hawks who have been adamant against cutting rates further.
In other news, the British Retail Consortium reported that overall sales in March were up 0.6 percent from the year before. Same-store sales declined 1.2 percent.
The dollar saw little change against the yen after seeing an uptick in the previous session and following a dip below the 100 mark Tuesday. In the early afternoon, the dollar is sitting at 99.265, just below its overnight quote. The dollar continues to hover near a multi-month high of 101.44.
The lack of considerable movement came as no significant economic news was on tap for Asia's largest economy, while traders digested poor economic reports from the U.S.
Data from the U.S. Department of Labor that showed that initial jobless claims fell to 610,000 for the week ended April 11th, down 53,000 from the previous week's revised figure.
The four-week moving average for initial claims, a statistic that flattens out week-to-week fluctuations in the data, dipped 8,500 to a level of 651,000.
Separately, data from the Commerce Department showed that housing starts fell 10.8 percent to an annual rate of 510,000 in March from the revised February estimate of 572,000. Economists had expected starts to slip to 540,000 from the 583,000 originally reported for the previous month.
Meanwhile, the Philly Fed said its index of regional activity in the manufacturing sector rose to a negative 24.4 in April from a negative 35.0 in March, with a negative reading indicating a contraction in the sector. Economists had expected a more modest increase to a negative 32.0.
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