Daily Afternoon Report 12.10.2017

The dollar turned higher against other major currencies on Thursday, erasing earlier losses, as the release of upbeat U.S. data added to optimism over the strength of the economy.

The U.S. Department of Labor reported on Thursday that initial jobless claims fell more than expected to 243,000 last week.

A separate report showed that producer prices increased 0.4% in September, in line with expectations. Core producer prices, which exclude food and energy also rose 0.4%, beating expectations for a 0.2% uptick.

The data came a day after the minutes of the Federal Reserve’s September policy meeting showed that policymakers remain divided on inflation.

Several policymakers believe additional tightening will depend on upcoming inflation data. However, most Fed members said they feel another rate increase this year “was likely to be warranted,” the report showed.

Market participants were now looking ahead to the highly-anticipated U.S. consumer price inflation data set to be released on Friday.

The single currency’s losses were expected to remain limited however, as Catalonia stopped short of formally declaring independence from Spain this week.

Catalan leader Carles Puigdemont on Tuesday proclaimed the region’s independence from Spain but said the effects would be postponed to allow for talks with the Spanish government, averting an immediate crisis.

Following meetings on Wednesday, Spanish Prime Minister Mariano Rajoy gave the Catalan government eight days to abandon its independence bid.

The yen strengthened mildly after recent surveys showed that Japanese Prime Minister Shinzo Abe is likely to retain his coalition’s dominant position in parliament after the October 22 snap election.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% at 92.98, off a two-week trough of 92.64 hit earlier in the day.