But slide could turn into spiral for greenback, strategists say
By Deborah Levine,
NEW YORK (MarketWatch) -- The dollar turned lower versus major rivals Thursday, heading back toward a one-year low, after the Federal Reserve Bank of Philadelphia's index on manufacturing jumped far more than forecast this month.
The U.S. currency had managed to hold some small gains after earlier reports showed weekly initial U.S. jobless claims rose less than expected and housing starts rose to a nine-month high.
"The dollar moved lower after the much stronger Philly Fed headline, as stocks added to earlier gains," said analysts at Action Economics.
The dollar index (DXY 76.19, -0.05, -0.06%) , a measure of the greenback against a trade-weighted basket of major currencies, fell to 76.124 in recent trade, from 76.194 late Wednesday.
The index slipped to 76.01 late in the Asian trading session, its lowest level in a year.
The euro traded at $1.4746, little changed from $1.4729 in North American trade late Wednesday. The euro earlier rose to $1.4766, its highest level versus the dollar in a year.
The dollar traded at 91.15 Japanese yen, up from 90.84 yen Wednesday. The dollar sank to a seven-month low against the Japanese currency on Wednesday.
The Philly Fed index rose to 14.1 this month from 4.2 in August, which was the first positive reading in nearly a year. Analysts polled by MarketWatch expected the index to rise to 8.
U.S. stock indexes rose marginally, with the Standard & Poor's 500 Index (SPX 1,071, +2.30, +0.22%) gaining 0.1%.
The dollar has been on the ropes in recent weeks. Pressure has been tied in part to rising risk appetite, which has seen investors shun the greenback's safe-haven status in favor of equities and other assets.
Still others expect the dollar to resume its more traditional relationship with economic data, rising with positive economic news and falling when the outlook for the U.S. turns gloomier.
The Labor Department said 545,0000 Americans filed initial claims for jobless benefits in the latest week, down 12,000. See more on jobless claims.
A separate report said housing starts increased to a 598,000 annualized pace in August. See more on housing starts.
"It would appear that housing construction has turned the corner," said economists at RDQ Economics.
