Investing.com - The dollar traded mixed to higher against most major currencies on Thursday after a robust Philadelphia-area factory gauge sparked demand for the greenback on sentiments that the U.S. economy may be gaining steam.
Profit taking chipped away the dollar's advance at times, as the currency has seen hefty demand in recent sessions as markets prepare for U.S. monetary to tighten while Europe and Japan move in the opposite direction.
In U.S. trading on Thursday, EUR/USD was down 0.02% at 1.2550.
Manufacturing activity in the Philadelphia-region expanded at its fastest rate since December 1993 in November, fueling optimism over the U.S. economic outlook, official data showed on Thursday.
The Federal Reserve Bank of Philadelphia reported earlier that its manufacturing index improved to 40.8 this month from 20.7 in October.
Analysts had expected the index to decline to 18.5 in September, and the surprise jumped strengthened the U.S. currency against its European counterpart.
On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions.
The current new orders index, which reflects the demand for manufactured goods, increased 18 points, to 35.7.
The current employment index rose 10 points in November, to 22.4, and hit a 3½ year high.
Upbeat U.S. inflation data also boosted the dollar by firming expectations that the Fed remains on track to raise interest rates next year.
The Labor Department reported earlier that the U.S. consumer price index was unchanged in October, beating expectations for a 0.1% dip.
On a year-over-year basis consumer prices rose 1.7% last month, unchanged from September, and stronger than market calls for a 1.6% jump.
Core inflation, which strips out volatile food and energy components, rose by 0.2% during the month, pushing the annual rate up to 1.8%, both figures in line with market forecasts, which fueled dollar demand.
Also from the Labor Department, data released earlier revealed that the number of Americans filing new claims for unemployment benefit fell by 2,000 last week, to 291,000. Economists had expected a fall to 286,000, thought it was still the tenth straight week that initial claims remained below 300,000.
The number of continuing claims also fell, to 2.33 million, the lowest level since December 2000.
The euro, meanwhile, softened after data showed that private-sector output slowed to its lowest in 16 months in November.
The euro zone’s services purchasing managers’ index fell to 51.3 this month, while the manufacturing PMI slid to 50.4 from 50.6 in October.
Germany private sector activity fell to a 16-month low, while French private sector output contracted for the seventh consecutive month.
The dollar was up against the yen, with USD/JPY up 0.01% at 117.95, and up against the Swiss franc, with USD/CHF up 0.06% at 0.9577.
The greenback was down against the pound, with GBP/USD up 0.13% at 1.5701.
The U.K. Office for National Statistics reported earlier that retail sales increased 0.8% last month, beating forecasts for a 0.4% gain, which gave the pound a boost.
September retail sales fell by 0.4%.
Year-on-year, retail sales rose at a rate of 4.3% in October, topping expectations for a 3.8% gain, after rising at a rate of 2.3% in September.
Core retail sales, which exclude automobile sales, increased by 0.8% last month, also outpacing forecasts for a 0.3% rise, after falling 0.3% the previous month.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.37% at 1.1299, AUD/USD up 0.20% at 0.8634 and NZD/USD up 0.31% at 0.7875.
The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.02% at 87.67.