The greenback edged higher against the majors, pushing the euro beneath the 1.40-level to 1.3950 and climbing back above the 90-mark versus the yen. Weekly jobless claims was higher than expected, climbing to 470k and missing estimates for a decline to 450k versus a downwardly revised 478k in the previous week. Durable goods orders fell short of market forecasts, with the headline figure up by 0.3% in December compared with a 0.4% decline in November. The durable goods orders excluding transportation was higher by 0.9% versus a 2.1% increase in the previous month.
In the coming session, markets will look ahead to several key economic reports including Q4 GDP, January Chicago PMI and the University of Michigan consumer confidence survey. The US economy is estimated to expand by a robust 4.6% in the fourth quarter, more than double the third quarter growth rate of 2.2%. The Q4 GDP deflator is expected to edge up to 1.3% from 0.4% while the PCE index is seen unchanged at 2.6%. The January Chicago purchasing managers index is estimated to slip to 57.5 from 58.7 in December. The University of Michigan consumer confidence survey is expected to edge up to 73.0 from 72.5, while the current component is seen unchanged at 78.0.
US equity bourses were lower with the Dow Jones and S&P 500 sliding by over 1% and the Nasdaq losing nearly 2%. Yesterday's FOMC policy statement revealed a dissenter to the vote, with Hoenig suggesting that current conditions no longer warrant exceptionally low rates for extended period of time. Gold and oil both drifted lower in Thursday trading.
Euro Tumbles Below 1.40
The euro slid further, breaking through the 1.40-level to 1.3948. Eurozone economic reports saw Germany's January unemployment rate unchanged at 8.2% and the unemployment change increase by 6.0k. The Eurozone December unemployment rate is estimated to edge up slightly to 10.1% from 10.0% in November.
EURUSD is poised to test lower following the breach of the 1.40 with our forecasts anticipating a test of the 1.38-level in the coming weeks. Initial support starts at 1.3950, followed by 1.39 and 1.3870. Additional floors are eyed at 1.3840, backed by 1.38 and 1.3770. Gains will target interim resistance at 1.40, followed by 1.4050 and 1.41. Subsequent ceilings are seen emerging at 1.4130, backed by 1.4165 and 1.42.