The major currencies were mixed in the Thursday session as US equities edged up marginally into positive territory, following a sharp rebound in the Shanghai Composite - which rallied by 4.52% overnight. The dollar eased lower against the euro and pound but largely remained confined within its recent range while the yen also relinquished some of its recent strength.

The Philadelphia Fed manufacturing index improved by more than forecast in August, expanding to a reading of 4.2 and beating estimates for an improvement to -2.0 from -7.0 in July. Meanwhile, the leading economic indicators index fell short of consensus forecasts for an unchanged monthly reading at 0.7%, instead slipping to 0.6%. Weekly jobless claims were also slightly higher than the prior week, edging up to 576k from 558k previously.

The economic calendar for Friday is light, with just the release of existing home sales due out at 8:30 AM. Existing home sales are seen increasing by 2.3% to 4.99 million units in July, versus 4.89 million units a month earlier.

Sterling Tops 1.66

The British pound climbed back above the 1.66-figure overnight following a stronger than expected report on UK retail sales in July. The report edged out expectations with annualized retail sales increasing by 3.3% versus 2.9% in the previous year and holding steady at 1.2% on a monthly basis. Also, the UK revealed its largest budget deficit on record at 8 billion pounds in July versus a 5.2 billion surplus a year earlier. The ballooning deficit figures will likely weigh heavily on the pound over the coming months.

Cable has since relinquished some of its earlier gains, slipping back to the 1.65-figure and lower from its session high at 1.6605. Support is seen at 1.6460, followed by 1.6430 and 1.64. Additional floors will emerge at 1.6370, backed by 1.6340 and 1.63. Meanwhile, interim resistance is eyed at 1.6550, followed by 1.66 and 1.6640. Subsequent ceilings are seen at 1.6670, followed by 1.67 and 1.6730.