Daily Afternoon Report 24.07.2015

The dollar pared gains against a basket of other major currencies on Friday after a disappointing report on U.S. new home sales dampened optimism sparked by the previous session’s upbeat jobless claims report.

Data on Friday showed that U.S. new home sales rose by 482.000 in June, disappointing expectations for an increase of 546.000. New home sales rose by 517.000 in May, whose figure was revised from a previously estimated gain of 546.000.

The report came after research group Markit said that its U.S. flash manufacturing purchasing managers’ index rose to 53.8 this month from 53.6 in June, beating expectations for an unchanged reading.

But demand for the greenback remained supported by data on Thursday showing that the number of individuals filing for initial jobless benefits in the U.S. in the week ending July 18 fell by 26,000 to a 40-year low of 255,000 from the previous week’s total of 281,000.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.20% at 97.48, after hitting session highs of 97.75 earlier in the day.

EUR/USD was down 0.24% to 1.0958, off-session lows of 1.0925.

The euro remained under pressure after Markit said that Germany’s preliminary manufacturing PMI ticked down to 51.5 this month from 51.9 in June, while the country’s services PMI slipped to 53.7 in July from 53.8 in June.

Markit also said that France’s preliminary manufacturing PMI fell to 49.6 this month from 50.7 in June, while the services PMI declined to 52.0 from 54.1.

For the entire eurozone, Markit said the composite PMI, which combines the manufacturing and the service sectors, slipped to 53.7 in July from 54.2 the previous month.

The pound was steady, with GBP/USD at 1.5503, easing off an almost two-week low of 1.5467.

Elsewhere, the dollar was little changed against the yen and the Swiss franc, with USD/JPY at 123.85 and with USD/CHF at 0.9603.

The Australian and New Zealand dollars were lower, with AUD/USD down 1.20% at fresh six-year lows of 0.7268 and with NZD/USD declining 0.53% to 0.6572.

Earlier Friday, data showed that New Zealand’s trade balance swung into a deficit of NZ$60 million in June from a surplus of NZ$350 million the previous month. Analysts had expected the trade surplus to narrow to NZ$100 million last month.

The export-related currencies also weakened after data showed that the Markit flash manufacturing PMI for China fell to 48.2 in July from 49.4 in June.

Meanwhile, USD/CAD rose 0.30% to trade at an 11-year peak of 1.3074.

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