The U.S. dollar softened on Thursday, partly due to a buoyant British pound and New Zealand dollar, which were both trading higher on the back of better-than-expected economic data.
Trade headlines dominated North American trading, though much of investors’ attention was focused elsewhere on Thursday. In the latest developments surrounding the North American Free Trade Agreement, a Bloomberg report quoted unnamed sources saying that a deal between Canada and the U.S. was unlikely this week.
The ICE U.S. Dollar Index DXY, -0.64% was down 0.3% at 94.228, and the greenback dipped to C$1.2906 versus the Canadian dollar USDCAD, -0.1703% from C$1.2921. This leaves the Canadian currency at its strongest since late May, according to FactSet data.
The New Zealand dollar NZDUSD, +0.8010% led developed-market currencies as one of the best performers early Thursday, after a report on second-quarter real gross domestic product showed that the New Zealand economy expanded 2.8% year-over-year, beating the expectation of 2.2%.
The kiwi dollar, as the antipodean currency is also known, last bought $0.6667, up from $0.6617 late Wednesday in New York.
In Salzburg, Austria, a European Union summit concerning Brexit is under way, adding the potential of volatility-inducing headlines to Thursday’s session.
Read: Why another Brexit summit is unlikely to put investors at ease
U.K. retail sales for August beat expectations, kicking the trading day off in a similar fashion to Wednesday, when the British pound was pushed in pulled into different directions after a higher than expected inflation read stoked ideas about future rate increases and a report from the Times of London said Theresa may was going to reject the EU’s new Irish border proposal.
The pound GBPUSD, +1.0652% was at its strongest since mid-July, buying $1.3229, compared with $1.3143 late Wednesday.
Meanwhile, the euro EURUSD, +0.8139% rose to $1.1720 from $1.1673. The euro-sterling pair EURGBP, -0.2252% saw the euro slide versus its British rival, buying £0.8856, down 0.3%.
In emerging markets, Turkey is in focus as the government is due to reveal its medium-term macroeconomic policy plan Thursday. The Turkish lira USDTRY, +0.9920% was weaker versus both the dollar and the euro ahead of the announcement. One dollar bought 6.2982 lira, up 0.8%, while the euro EURTRY, +1.7967% fetched 7.3838 lira, up 1.2%.
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