Philly Fed, Spain bond auction, Swiss rates and yuan share spotlight
By William L. Watts, Lisa Twaronite and Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- The dollar extended its decline against the euro Thursday as currency traders assessed U.S. economic data on manufacturing, jobless claims, wholesale prices and capital inflows.
The euro reached a one-month high against the U.S. unit following what proved to be a strong debt auction in Spain.
The dollar index (DXY 81.14, -0.35, -0.43%) , which tracks the performance of the greenback against a basket of six major currencies, fell to 81.115, down from 81.429 late Wednesday. The gauge had fallen as low as 81.074 during European trading hours.
The euro (EURUSD 1.3100, +0.0088, +0.6763%) rose to $1.3108, up from $1.3020 late Wednesday in New York currency trading, and touched its highest level against the dollar since Aug. 11.
Versus the Japanese yen, the dollar (USDYEN 85.6700, -0.1000, -0.1166%) stood at ¥85.65, little changed from ¥85.66 late Wednesday, as investors stayed on high alert for further signs of direct currency action by Japanese authorities.
The Federal Reserve Bank of Philadelphia said its manufacturing index improved to minus 0.7 this month from minus 7.7 in August, though economists had expected it to rebound more. See more on Philly Fed.
A pair of earlier reports from the Labor Department showed that weekly jobless claims fell 3,000 to 450,000 and that producer prices rose 0.4% during August. Read about jobless claims.
Separately, the Treasury Department said foreign investors bought a net $61.2 billion of long-term U.S. assets in July, up from $44.4 billion in June. Demand for Treasury bonds strengthened, reflecting increases in holdings by China, Japan and the U.K.
During European trading hours, the Spanish government sold 4 billion euros ($5.2 billion) of 10- and 30-year bonds, seeing greater demand from investors even though yields were lower than in the previous sale. Read about the auction.
The outcome “suggests demand for Spanish paper has increased significantly, as fears of a sovereign-debt default continue to recede,” said Boris Schlossberg, director of currency research at GFT.
The British pound (GBPUSD 1.5633, +0.0007, +0.0448%) was little changed at $1.5627.
Earlier, the pound came under selling pressure after data showed U.K. retail sales unexpectedly fell in August. Read about U.K. retail sales.
Firmer yen
On Wednesday, the dollar had soared 3.1% against the yen as Japan sold an estimated ¥2 trillion ($23 billion) of its own currency to buy dollars, in what would be a record for a single day, according to media reports. The move came a day after the dollar sank to a 15-year low in trading against the yen.
The exact amount of the intervention will be revealed at the beginning of next month, when Japan’s Ministry of Finance releases its monthly foreign-reserves data.
