Investing.com – The U.S. dollar little changed Thursday as mostly upbeat economic data was offset by strong rise in sterling on bets the U.K. will avoid leaving the EU without a trade deal.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.08% to 95.76.
As U.K. Prime Minister Theresa May seeks cross-party consensus on a Brexit deal after her government won a vote of confidence on Wednesday, traders continue to bet on the UK securing a withdrawal deal, pushing the pound higher against the greenback.
The way forward on Brexit, however, is paved with uncertainty as Labor leader, Jeremy Corbyn, has refused to enter cross-party talks demanding May rule out a no-deal Brexit. That is a demand which May has stressed is “impossible.”
GBP/USD rose 0.76% to $1.2979.
The pound's strength kept a lid on gains in the greenback even as a key manufacturing report and labor data topped economists’ estimates.
The Philadelphia Fed said Thursday its manufacturing index rose to a reading of 17 in January from a revised 9.1 last month.
The U.S. Department of Labor reported Thursday that initial jobless claims dropped by 3,000 to a seasonally adjusted 213,000, beating economists’ forecast for a drop to 216,000.
The upbeat regional manufacturing report comes a day after the Fed’s Beige Book – an economic report, based on anecdotal information collected by the Fed’s 12 reserve banks – highlighted concerns about manufacturing growth amid rising costs, trade and political uncertainty.
Elsewhere, EUR/USD fell 0.14% $1.1381, while USD/CAD rose 0.34% to C$1.3299 as falling oil prices weighed on the loonie, supporting gains in the pair.
USD/JPY fell 0.02% to Y109.06.