After struggling for direction during the Asian and European sessions on Thursday, the U.S. dollar climbed higher in the New York session, buoyed by data showing a more than expected increase in U.S. retail sales in the month of September. Data showing a drop in jobless claims contributed as well to the dollars rise.
Data from the Commerce Department showed retail sales rose by 0.4% in September after edging up by 0.1% in August. Economists had expected retail sales to rise by 0.3%. Excluding sales by motor vehicle and parts dealers, retail sales climbed by 0.5% in September after rising by 0.2% in August. Ex-auto sales were expected to inch up by 0.1%.
A separate report released by the Labor Department showed an unexpected pullback by first-time claims for U.S. unemployment benefits in the week ended October 12th. The report said initial jobless claims fell to 241,000, a decrease of 19,000 from the previous weeks revised level of 260,000.
Economists had expected jobless claims to inch up to 260,000 from the 258,000 originally reported for the previous week.
Meanwhile, the Federal Reserve released a report showing industrial production in the U.S. fell by slightly more than expected in the month of September, decreasing by 0.3%, after rising by a downwardly revised 0.3% in August. Economists had expected industrial production to dip by 0.2% compared to the 0.8% increase originally reported for the previous month.
The dollar index, which surged to 103.87, eased slightly to 103.79 subseqeuently, but still remained well above the flat line, gaining about 0.2%.
Against the Euro, the dollar strengthened to 1.0832 from 1.0862, as the European Central Bank cut interest rates again. The ECB cut key interest rates by 25 basis points, as expected, as policymakers assessed that the disinflation process is on track, although they are increasingly concerned over the health of the euro area economy following some soft data released since the September policy session.
The Governing Council, led by ECB President Christine Lagarde, lowered the deposit facility rate by a quarter basis point to 3.25% following the rate-setting session held in Ljubljana, the capital of Slovenia.
The dollar weakened against Pound Sterling, losing about 0.17% at 1.3011. Against the Japanese currency, the dollar firmed to 150.23 yen, up from the previous close of 149.64 yen.
The dollar was down against the Aussie at 0.6696, compared to Wednesdays close of 0.6667. The Swiss franc eased slightly to 0.8661 a dollar, while the Loonie weakened to 1.3798 a unit of the U.S. currency.