In Forex trading online, the dollar slipped from a seven-week high against the yen and has changed slightly against the euro on Thursday (12-09-2013) as U.S. bond yields declined and investors speculated the Federal Reserve will be cautious about reducing stimulus when it meets next week.
The euro recouped earlier losses it made after data showing an unexpected decline in U.S. jobless claims and a contraction in euro zone industrial output.
Analysts said the dollar could remain under pressure going into the Fed's meeting next Tuesday and Wednesday (17th and 18th of September). Uncertainty about the timing and pace of Fed action grew after last week's disappointing U.S. August employment report.
Data on (12-09-2013) showing that U.S. initial jobless claims fell sharply last week further clouded the picture; as much of the decline appeared to be due to technical problems in the claims processing. Before the Fed meeting, U.S. retail sales and consumer price data will be closely watched.
"Unless we get a significant new piece of information, we're going to be in this range-bound pattern, maybe with some bias for dollar weakness, as we wait for the Fed," said Vassili Serebriakov, FX Strategist at BNP Paribas in New York.
The dollar lost 0.5 percent to 99.32 yen in Forex trading Online, retreating from a seven-week high of 100.60 yen touched on Wednesday, according to Reuters data.
The euro was little changed at $1.3302, hitting a session low of $1.3259 after the U.S. claims data.
Euro zone industrial production fell 1.5 percent in July, compared with a 0.1 percent increase forecast, a sign of weak demand from European households and the shakiness of the bloc's economic recovery.
European Central Bank President Mario Draghi said on Thursday (12-09-2013) that the recent rise in bank-to-bank borrowing costs was unwarranted. He took a cautious view of the recent signs of stabilization in the euro zone economy, saying the recovery was still "very, very green".
Against the yen, the euro lost 0.6 percent to 132.17 yen. Against the pound, it was trading near a recent 7-1/2-month low in Forex trading online.
The dollar index, which measures the greenback versus a basket of six currencies, fell 0.1 percent to 81.455, having hit a two-week low of 81.356, the weakest since Aug. 28.
Markets have tempered their expectations for any aggressive stimulus withdrawal by the Fed. That has led investors to trim long dollar positions built on expectations the Fed will unwind or 'taper' its $85 billion monthly bond purchases by a much larger amount. Investors should take this information into account when making decisions in the Forex trading online market.