Investing.com – The U.S. dollar traded within tight ranges on Thursday as traders digested some mixed economic data ahead of the widely watched payrolls report to end the week.
At 05:35 ET (09:35 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, edged higher to 103.917, after hitting its highest since late July on Tuesday.
Dollar stable
The dollar has struggled to make more progress after recent gains as recent economic data has proven difficult to read in terms of illustrating the strength of the US economy.
The US rose in October, data showed on Wednesday, but then yields came in lower than expected in September, falling to their lowest level since January 2021.
Moreover, data shows that third quarter annualized growth is 2.8%, slightly lower than the 3% expected by economists.
Thursday’s economic data will include the weekly price gauge, the Fed’s favorite price gauge, in addition to the deflator, but most eyes will be on Friday’s release.
Also of note was the run-up to Tuesday’s presidential election, with the dollar benefiting from trading bets that Republican candidate Donald Trump was expected to win, although the race with Vice President Kamala Harris appears very close.
DXY is currently near support at 104.00, according to ING, “and after well over a month of one-way bullish traffic, this could be a modest correction in the 103.65 area.”
German retail sales are rising
In Europe, it traded largely unchanged at 1.0857 after an unexpected rise in September, with a gain of 1.2% compared to the previous month.
This followed data showing growth in the third quarter was 0.2% higher than in the previous three months, above expectations.
However, the European Central Bank is still expected to continue cutting rates, especially if rates remain below the central bank’s 2.0% target later in the session.
The ECB has cut rates three times this year, with the latest cut coming at its last meeting in October, the first consecutive cut since the 2011 euro crisis.
“EUR/USD could retest yesterday’s high of 1.0870 on today’s European data – but a rise to 1.09030 could be a bridge too far given next Tuesday’s crucial US elections,” ING said .
rose 0.1% to 1.2976 in the wake of Wednesday’s UK budget, the first for the new Labor government.
“Labour’s big tax and spending budget – described by some as an ‘old Labour’ policy – continues to reverberate across UK asset markets,” ING said. “The British pound was briefly supported yesterday by views that the budget was stimulative and that the Bank of England easing cycle should be priced higher.”
“But… we suspect the BoE is unlikely to be influenced by the government’s budget plans.”
BOJ maintains interest rates at low levels
fell 0.6% to 152.47, with the yen gaining even after continued ultra-low interest rates earlier Thursday.
BOJ Governor Kazuo Ueda stressed the need to scrutinize global economic developments when deciding when to tighten policies next, highlighting risks to a fragile domestic recovery.
“As for the timing of the next rate hike, we do not yet have a predetermined idea. We will carefully examine the data available at that time at each policy meeting and update our view of the economy and the outlook as we set policy” , he said.
rose 0.1% to 7.1192, following the release of China’s , which showed activity growing in October for the first time in six months.
The official PMI rose from 49.8 in September to 50.1 in October, just above the 50 mark that separates growth and contraction.
