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Dollar edges lower as market preps for Yellen speech

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Shutterstock photo - - The dollar traded lower against most major currencies on Thursday despite a fresh crop of otherwise bullish data hitting the wire, as many investors sold the greenback for profits to await Federal Reserve Chair Janet Yellen's speech in Jackson Hole, Wyoming, on Friday.

In U.S. trading on Thursday, EUR/USD was up 0.18% at 1.3282.

The Federal Reserve released the minutes of its July policy meeting on Wednesday, and the document revealed that interest rates could come sooner rather than later if the labor market continues to recover, which initially bolstered the dollar.

Profit taking sent the greenback edging lower on Thursday, as many investors bet Fed Chair Janet Yellen will provide dovish words in a Jackson Hole speech on Friday to complement the hawkish minutes in order to convey to markets that even though rates will rise, monetary authorities will make sure they do so gradually.

Upbeat U.S. data took a back seat to Yellen expectations in late-morning trading on Thursday.

The Federal Reserve Bank of Philadelphia said that its manufacturing index topped a three-year high of 28.0 this month from July's 23.9 reading. Analysts had expected the index to decline to 19.2 in July.

Separately, market research group Markit said that its preliminary U.S. manufacturing purchasing managers' index increased to a four-year high of 58.0 this month from a final reading of 55.8 in July. Analysts had expected the index to ease down to 55.7 in August.

Data also showed that U.S. existing home sales increased 2.4% to 5.15 million units last month from 5.03 million in June. Analysts had expected existing home sales to dip 0.4% to 5.02 million units in July.

Also on Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Aug. 16 decreased by 14,000 to 298,000 from the previous week's revised total of 312,000.

Analysts had expected jobless claims to fall by 12,000 to 300,000 last week.

Meanwhile in Europe, data showed that activity in the euro zone's manufacturing sector slowed to a 13-month low in August, with the euro zone manufacturing PMI down to 50.8 from 51.8 in July. Economists had forecast a decline to 51.3.

The region's services PMI slid to 53.5 from 54.2 in July, in line with forecasts.

Activity in Germany's factor sector slowed but remained solid, while manufacturing activity in France contracted for a sixth successive month.

The dollar was up against the yen, with USD/JPY up 0.04% at 103.81, and down against the Swiss franc, with USD/CHF down 0.25% at 0.9112.

The greenback was up against the pound, with GBP/USD down 0.08% at 1.6582.

The pound fell came under pressure earlier after official data showed that U.K. retail sales rose 0.1% in July, disappointing expectations for an increase of 0.4%. Retail sales for June were revised to a 0.2% gain from a previously estimated 0.1% rise.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.25% at 1.0943, AUD/USD up 0.16% at 0.9302 and NZD/USD up 0.38% at 0.8404.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.10% at 82.21.

On Friday, expect markets to move on speeches delivered by Fed Chair Janet Yellen and ECB President Mario Draghi at the annual economic symposium in Jackson Hole, Wyoming. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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