EUR/USD trimmed losses after US durable goods orders and initial jobless claims

The euro trimmed earlier losses against the US dollar later on Thursdays European session, following the mixed US reports.

EUR/USD regained ground, after recording a session low at 1.3164 at 9:45, to reach 1.3237 at 12:46 GMT. At 13:36 GMT the pair was trading at 1.3221, up by 0.15% for the day. Support was expected at July 22nd low, 1.3133, while resistance was to be encountered at July 24th high, 1.3255.

Earlier on Thursday it became clear that durable goods orders in the United States rose by 4.2% in June due to higher demand for goods used in civil aviation, marking a third consecutive month of increase and exceeding considerably preliminary estimates that orders will climb by 1.4%. In May the value of the indicator was revised up to an increase by 5.2% from a 3.6% rise previously. In June orders of equipment used in transportation marked the largest rate of increase, 12.8%. Durable Goods Orders ex Transportation registered no change in June, while projections showed a 0.5% increase. On the other hand, Durable Goods Orders ex Defense rose by 3.0% in June, confounding expectations that the indicator will drop by 0.9%. Orders of goods used in the sector of manufacturing registered a 0.7% increase on a monthly basis in June, after climbing 2.2% in May.

At the same time it was reported that the number of people, who filed for unemployment assistance in the United States, rose at a moderate pace during the week ended on July 20th 2013, which gave an indication that labor market recovery was developing unevenly. Initial jobless claims rose by 7 000 to reach 343 000. Results during the preceding week were revised up to 336 000 from 334 000 previously. Initial estimates pointed that the number of claims will reach 340 000. The wider gauge of jobless claims, or the average number during the past four weeks, which lacks seasonal effects, showed an improving labor market, as claims were lower by 1 250 to 345 250.

It seemed that the difficulties, which US labor market continued to encounter, caused greater impact upon the greenback, triggering selling impulse, despite the shown stability in durable goods orders and optimism over US housing market, with new home sales rising to a five-year high, according to data, released on Wednesday. However, recent economic fundamentals pointed in one direction – that US economic recovery was on track. If economy manages to overcome the current imbalances in labor market development and economic data in the future months continues submitting positive signals, the probability that the Federal Reserve Bank will embark on a scale back of its stimulus, may heighten.

Meanwhile, also on Thursday, a report said that IFO Business Climate indicator in Germany advanced slightly in July to a reading of 106.2, above the expected 106.1, while in June this indicator stood at 105.9. Additionally, IFO indicator of economic expectations ticked down to a reading of 102.4 in July, slightly below the estimates of a value of 102.5, where the index stood in June as well. Germanys IFO Current Assessment recorded a higher value in July, reaching 110.1, while it pointed 109.4 in June.

Elsewhere, the euro advanced against the British pound, as EUR/GBP cross rose by 0.15% to trade at 0.8634 at 13:47 GMT. EUR/JPY pair, on the other hand, erased 0.34% during the current session, trading at 131.92 at 13:48 GMT.

Last but not least, the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, lost 0.4% to 82.075.