WASHINGTON (dpa-AFX) - The dollar is turning in a mixed performance against its major rivals Thursday afternoon, but is little changed overall. The relatively flat performance surprisingly follows on the heels of a policy meeting announcement from the European Central Bank and a trio of better than expected U.S. economic reports. Investors remain in a cautious mood ahead of the inauguration of Donald Trump on Friday.
First-time claims for U.S. unemployment benefits unexpectedly declined in the week ended January 14th, according to a report released by the Labor Department on Thursday. The report said initial jobless claims fell to 234,000, a decrease of 15,000 from the previous week's revised level of 249,000.
Economists had expected jobless claims to rise to 255,000 from the 247,000 originally reported for the previous week.
After reporting a steep drop in new U.S. residential construction in the previous month, the Commerce Department released a report on Thursday showing that housing starts showed a significant rebound in the month of December.
The Commerce Department said housing starts jumped by 11.3 percent to an annual rate of 1.226 million in December from the revised November rate of 1.102 million. Economists had expected housing starts to rise to an annual rate of 1.200 million from the 1.090 million originally reported for the previous month.
Meanwhile, the report said building permits, an indicator of future housing demand, edged down by 0.2 percent to a rate of 1.210 million in December from 1.212 million in November. Building permits had been expected to rise to 1.230 million from the 1.201 million originally reported for the previous month.
Philadelphia-area manufacturing activity unexpectedly grew at a faster pace in the month of January, the Federal Reserve Bank of Philadelphia revealed in a report on Thursday. The Philly Fed said its index for current manufacturing activity in the region rose to 23.6 in January from a revised 19.7 in December, with a positive reading indicating growth.
The increase came as a surprise to economists, who had expected the index to drop to 16.0 from the 21.5 originally reported for the previous month.
The European Central Bank left its key interest rates unchanged for a seventh consecutive policy session and maintained its asset purchases, which will continue at a reduced pace till the end of this year, as the solid economic momentum is sustained in the euro area despite the continuing political flux.
The Governing Council, led by ECB President Mario Draghi, left all its three interest rates unchanged. The main refi rate was kept unchanged at a record low zero percent and the deposit rate at -0.40 percent. The marginal lending facility rate was held at 0.25 percent.
'The Governing Council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases,' the ECB said in a statement.
The bank also retained its asset purchases of EUR 80 billion a month till March and to continue them at a reduced size of EUR 60 billion a month till December 2017.
Asset purchases can be extended beyond December if necessary, until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim, the ECB added.
Eurozone inflation is being driven largely by energy costs and the recent pick up in momentum is unlikely to sustain, ECB President Mario Draghi said Thursday, adding that policymakers will continue to look through transient changes.
'There are no signs yet of a convincing upward trend in underlying inflation,' Draghi said in Frankfurt in the introductory statement to his customary post-decision press conference.
Headline inflation is likely to pick up further in the near term, on the back of higher energy prices, the ECB Chief said. However, underlying inflation is expected to rise more gradually over the medium term, supported by monetary policy, the economic recovery and the corresponding gradual absorption of slack, he added.
The dollar fell to a low of $1.0676 against the Euro Thursday morning, but bounced back to around $1.0590 after today's ECB announcement. The U.S. currency has since drifted back towards the unchanged line, currently trading around $1.0635.
The euro area current account surplus reached a record high level in November, the European Central Bank reported Thursday. The seasonally adjusted current account surplus rose to EUR 36.1 billion in November from EUR 28.3 billion in October.
Eurozone house prices grew at the fastest pace in more than eight years in the third quarter of 2016, Eurostat reported Thursday.
House prices advanced 3.4 percent year-on-year in the third quarter, faster than the 3 percent increase seen in the second quarter. This was the fastest since the first quarter of 2008, when prices climbed 3.5 percent.
The buck slipped to a low of $1.2341 against the Euro Thursday, but has since rebounded to around $1.2315.
The house price balance in the United Kingdom was down in December, the latest survey from the Royal Institution of Chartered Surveyors showed on Thursday with a seasonally adjusted reading of 24 percent. That was shy of expectations for 30 percent following the downwardly revised 29 percent reading in November.
The greenback broke out to a 1-week high of Y115.625 against the Japanese Yen Thursday, but has since eased back to around Y115.
Copyright RTT News/dpa-AFX