Investing.com - The greenback traded largely lower against most major currencies on Thursday after investors digested weekly jobless claims data and determined the numbers depicted a labor market still in need of monetary support to some degree.
U.S. trading on Tuesday, EUR/USD was up 1.09% at 1.3694, as solid factory and service-sector data out of Europe bolstered the single currency.
The euro zone’s composite output index rose to a 31-month high of 53.2 in January, up from a final reading of 52.1 in December.
The report bolstered the euro by fanning expectations for the European Central Bank to hold off on easing monetary policy further and instead let policy remain unchanged to see if the economy can recover on its own.
Manufacturing activity in Europe's largest economy Germany expanded at its fastest pace since May of 2011 this month, coming in at 56.3, beating market forecasts for a 54.6 reading.
Meanwhile in the U.S., the Labor Department reported earlier that weekly initial jobless claims rose in line with expectations last week, but the number of continuing jobless claims remained above the 3 million mark for a second successive week.
The number of individuals filing for unemployment assistance in the U.S. last week rose to 326,000, up from the previous week’s revised total of 325,000 and in line with expectations.
The number of people filing continuing unemployment claims rose to 3.056 million up from 3.022 million in the week to Jan. 11. Analysts had expected continuing claims to fall to 2.930 million, and the numbers reminded investors that the Federal Reserve will take its time dismantling its USD75 billion bond-buying program.
Fed bond purchases tend to soften the dollar as long as they remain in effect by suppressing long-term interest rates to spur recovery, sending investors to asset classes like stocks and commodities in the process.
Elsewhere, U.K.-based Markit Economics reported that U.S. factory output fell to a three-month low in January, mainly due to the impacts that wintry weather had on commerce.
The U.S. manufacturing PMI declined to 53.7 this month from a final reading of 55.0 in December. Analysts had expected the index to hold steady.
Also Thursday, the National Association of Realtors reported that U.S. existing home sales came in at 4.87 million units last month from 4.82 million in November, missing expectations for an increase to 4.94 million.
The greenback was down against the pound, with GBP/USD up 0.31% at 1.6626.
The dollar was down against the yen, with USD/JPY down 1.29% at 103.18, and down against the Swiss franc, with USD/CHF down 1.55% at 0.8974.
The Swiss government said earlier it agreed to a Swiss National Bank request to raise the level of capital banks must hold to underpin mortgage lending in order to curb the country’s booming housing market.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.18% at 1.1107, AUD/USD down 1.05% at 0.8759 and NZD/USD down 0.10% at 0.8300.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.96% at 80.53.