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Forex - Dollar falls on profit taking, E.U. calls for less austerity

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Shutterstock photo - Profit taking ended the dollar's multi-session rally on Thursday when investors sold the unit for profits after solid data sent it gaining for several days.

Calls out of Europe for greater focus on growth and less on austerity sent the greenback diving as well.

In U.S. trading on Thursday, EUR/USD was up 0.32% at 1.3002.

At an E.U. summit earlier, France called for greater budgetary flexibility so that member nations will be able to stimulate their economies more and steer the eurozone back towards recovery.

Calls for greater focus on economic growth and less on austerity lifted the single currency against the dollar despite solid U.S. jobs data.

The U.S. Department of Labor reported earlier that the number of individuals filing for initial weekly jobless benefits in the week ending March 10 fell by 10,000 to 332,000, defying expectations for an increase of 8,000 to 350,000.

Solid wholesale pricing data in the U.S. boosted spirits as well.

The Bureau of Labor Statistics said the U.S. producer price index rose 0.7% in February from January, in line with expectations, after rising 0.2% in January from December.

The monthly core producer price index rose 0.2% in February, in line with expectations after rising 0.2% in January.

The numbers fueled already growing expectations that Federal Reserve will soon roll out exit strategies for its monetary stimulus programs that weaken the greenback by design to spur recovery, though profit taking kicked in and ended the dollar's rally.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 1.04% at 1.5078, as investors viewed the U.K. currency as attractively priced against an overbought dollar.

The dollar was flat against the yen, with USD/JPY trading up 0.02% at 96.14, and down against the Swiss franc, with USD/CHF trading down 0.58% at 0.9468.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.54% at 1.0222, AUD/USD up 0.79% at 1.0380 and NZD/USD trading up 0.40% at 0.8215.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.45% at 82. 83.

The U.S. on Friday will release official data on consumer inflation and preliminary data from the University of Michigan on consumer sentiment. The U.S. is also to release data on industrial production, the capacity utilization rate and manufacturing activity in New York state. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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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