US recap: EUR/USD buoyed as market takes a breather before PCE
USD/JPY-Backing away from the extremes
AUD/USD-Bears cede some ground on post-data risk improvement
July 25 (Reuters) -The dollar index eased slightly in a mixed session on Thursday, with the U.S. currency failing to derive broad and lasting support from above-forecast U.S. GDP data and a surprisingly large fall in initial jobless claims.
The market was also preparing for Tokyo CPI in the upcoming Asia session, a key release before next week's BOJ meeting, while the market remains transfixed by the looming June PCE report on Friday since the Fed closely watches that series as a gauge of inflation.
Meanwhile, a rebound in risk appetite also tempered some recent dollar support as Wall Street posted gains for much of the day, while trading around the yen stabilized following a bout of short-covering this week that took USD/JPY to a 2-1/2-month low of 151.945 on Thursday, before it bounced into positive territory.
Advance Q2 GDP showed a rise of 2.8% versus expectations of 2.0% and a previous result of 1.4%. Core PCE inflation for the quarter slowed, though not quite as much as expected.
Initial jobless claims fell to 235k from an upwardly revised 245k, versus expectations of 238k. Headline durable goods produced a massive downward surprise, but the core series came in solidly above expectations.
U.S. Treasury yields rose 2-3bp at the front end, were stable 5s and fell by 2-5bp in longer maturities.
The S&P 500 was up 0.05% by U.S. afternoon trade, though it had been higher earlier in the session as the stronger-than-expected GDP data provided at least some temporary relief after the previous session's tech mauling.
WTI firmed 0.82% after the strong U.S. economic data stoked expectations for higher crude demand, but the gains were limited by concerns about lower oil imports from China.
Copper edged 0.17% higher, rebounding from near four-month lows hit earlier on Thursday.
Gold was down 1.71% after slipping to its lowest in over two weeks as profit-taking kicked in following the recent rally, while traders awaited the U.S. PCE report for clues on when the Fed will cut interest rates.
Heading toward the close: EUR/USD +0.07, USD/JPY +0.03%, GBP/USD -0.39%, AUD/USD -0.61%, GBP/JPY -0.09%, EUR/JPY -0.03%, AUD/JPY -0.63%
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(Burton Frierson)
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