Dollar Extends Recent Upswing As Anxiety Prevails

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The dollar continued to rebound versus other major currencies Thursday morning in New York, extending its 5-month high versus the euro as traders geared up for a slew of economic data and corporate earnings news.

Concerns about China's fiscal policy and that fragile global recovery may peter out have given the safe haven dollar a big boost this week.

The weekly jobless claims report for the week ending January 16 is expected from the Labor Department at 8.30 a.m. ET. Economists expect that the jobless claims declined marginally to 440,000 for the week. Lingering weakness in the jobs market has generated anxiety about the sustainability of the US recovery.

The results of the Philadelphia Federal Reserve's manufacturing survey for January are on tap later in the day. Economists forecast that the diffusion index of current activity to be 18.8 for the month.

Before the markets open, the major companies scheduled to report their quarterly results include Goldman Sachs (GS), KeyCorp. (KEY), Xerox (XRX), Legg Mason (LM), Meredith (MDH), and Southwest Air (LUV).

Google (GOOG), Advanced Micro Devices (AMD), American Express (AXP) and Capital One (COF) are among the major companies that would release their results after the markets close for trading.

The dollar rose to 1.4030 in very early dealing versus the euro, but came off its highest levels of the day as US stock futures drifted higher. Stocks closed significantly lower yesterday, as China indicated it would act to slow its economic expansion.

Markit Economics announced on Thursday that the Flash Eurozone Composite Output Index, which is a weighted average of the manufacturing and services PMIs, eased to 53.6 in January from 54.2 in December.

The dollar gained on the yen, hitting a weekly high above Y91.70 after touching a monthly low near Y90.25 on Wednesday.

Japan's leading index for November was revised down to 90.7 from 91.2, a final report published by the Cabinet Office revealed Thursday. However, the index improved for the ninth consecutive month in November.

Versus the sterling, the buck improved to 1.6125, extending its move away from a 6-week low of 1.6457.

Depressed commodity prices have helped the dollar find its footing versus the resource-backed loonie. With oil hovering near the $78 a barrel mark, the dollar rallied back above C$1.0500.

(Market News Provided by RTTNews)