Forex - Dollar Index Edges Lower, U.S. Data Ahead

Forex - Dollar Index Edges Lower, U.S. Data Ahead  | Oct 19, 2017 10:18

Dollar loses some ground ahead of U.S. economic reports - The dollar edged lower against other major counterparts on Thursday, as investors eyed upcoming U.S. economic reports amid ongoing speculation surrounding the next head of the Federal Reserve.

The greenback had strengthened broadly following reports earlier in the week that U.S. President Donald Trump was favoring Stanford economist John Taylor to replace Federal Reserve Chair Janet Yellen next year. Taylor is seen as more hawkish than current Yellen.

But the dollar turned lower after data on Wednesday showed that U.S. housing starts hit a one-year low in September, while building permits also slumped.

Market participants were looking ahead to reports in U.S. jobless claims and manufacturing activity due later in the day for further indications on the strength of the economy.

EUR/USD was up 0.16% at 1.1806, while GBP/USD dropped 0.37% to 1.3155 after data showed that UK retail sales fell more than forecast in September.

Meanwhile, the Spanish government was set to suspend Catalonia’s autonomy and impose direct rule after the region’s president refused to abandon the push for independence.

The announcement came after Carles Puigdemont threatened a unilateral declaration of independence if the Spanish government did not agree to talks on the issue.

The yen turned higher, with USD/JPY down 0.21% at 112.70, off Wednesday's more than one-week high of 113.09, while USD/CHF slid 0.34% to 0.9782.

Investors were eyeing Japan's general election scheduled on Sunday. According to most polls, Prime Minister Shinzo Abe's coalition is on track to secure a two-thirds majority.

The Australian dollar was higher, with AUD/USD up 0.18% at 0.7859, while NZD/USD tumbled 1.72% to 0.7028, the lowest since October 10.

Earlier in the day, the Australian Bureau of Statistics said that the number of employed peole increased by 19,800 in September, beating expectations for an increase of 15,000.

The unemployment rate ticked down to 5.5% last month from 5.6% in August.

Also Thursday, data showed that China's gross domestic product expanded by 1.7% in the thid quarter, in line with expecations.

Meanwhile, USD/CAD held steady at 1.2467.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.09% at 93.22 by 05:15 a.m. ET (09:15 GMT), off Wednesday's one-and-a-hald week high of 93.65.

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