(RTTNews) - The US dollar was trading mostly lower in early deals Thursday as caution prevailed ahead of the weekly jobless claims data later today and Bernanke's highly anticipated address in the Jackson Hole symposium on Friday. Traders are eagerly waiting for hints of a third round of quantitative easing although the market scaled back stimulus hopes from the U.S. and Europe. Yesterday's Beige Book showed that the U.S. economic activity continued to expand gradually in July and early August. While six districts indicated that the local economy continued to expand at a modest pace, another three cited moderate growth. Meanwhile, data from the U.S. yesterday were also quite positive with the second quarter GDP revising upward and pending home sales for July surpassing expectations. Italy's borrowing costs declined further at a debt auction today and demand for the country's debt improved as investors hope that the European Central Bank would resume its bond-buying plan to help lower the yields for Italy and Spain. The Italian Treasury reportedly raised its maximum target of EUR 6.5 billion from the sale of a new 10-year bond and five year debt. The latest auction follows two successful sales yesterday and the day before. The agency sold EUR 4 billion of the new benchmark bond due November 22, matching the top end of its target range. The yield on the 10-year debt dropped to 5.82 percent from 5.96 percent paid on July 30 for a security of similar maturity. The dollar traded lower against the Swiss franc, falling to the day's low of 0.9561 around 5:05 am ET. The succeeding bounce was not solid and the pair is hovering around the 0.9570/75 area. The key level to watch on the downside is 0.9545/50. The US currency weakened against the yen following a report showed that Japan's retail sales were down a seasonally adjusted 1.5 percent in July, worse than forecasts for a fall of 0.5 percent. The dollar-yen pair has been trading the day's bottom range at 78.60/70 since late Asian deals. The greenback fell as low as 1.5846 against the pound before recovering some gains around 7:00 am ET. Further bearish bias could help the buck re-test yesterday's low of 1.5857 n the near-term. The key level to watch on the downside is 1.59. The recent correction for the dollar against the euro was not so solid and the greenback continued to move in its bearish track ahead of the key risk-events. The dollar bought at 1.2550 per euro around 7:30 am ET and the domestic unit is about to re-test the day's low of 1.2564 in the near-term.

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