Daily Afternoon Report 15/11/2012 | Forex Trading Analysis

The U.S. dollar trimmed losses against the other major currencies on Thursday, after official data showed the number of people who filed for unemployment assistance in the U.S. last week surged to the highest level since April 2011.

As the U.S. Department of Labor said, the number of individuals filing for initial jobless benefits in the week ending November 10 rose by 78,000 to a seasonally adjusted 439,000, compared to expectations for an increase of 14,000 to 375,000.

Whereas, the euro held gains against the U.S. dollar on Thursday, after the release of mixed U.S. economic data, although concerns over the euro zone debt crisis and U.S. fiscal policy remained.

In the euro zone, official data released earlier showed that the region’s economy shrank 0.1% in the third quarter, following a contraction of 0.2% in the preceding quarter.

Year-on-year, euro zone gross domestic product fell 0.6% compared to a year earlier after contracting at a rate of 0.5% in the previous quarter.

Data also showed that Spain's economy contracted by 0.3%, while Italy’s economy shrank 0.2% in the third quarter.

Furthermore, concerns over the health of triple-AAA Austria and the Netherlands intensified after data showed Austria’s economy shrank 0.1% in the three months to September, while the Dutch economy contracted by an alarming 1.1%. Economists had only expected a decline of 0.2%.

A separate report showed that consumer price inflation in the euro zone held steady at 2.5% in October, unchanged from an initial estimate and in line with expectations.

Core CPI, which excludes food, energy, alcohol, and tobacco costs held steady at 1.5%, unchanged from a preliminary estimate and matching forecasts.

In other news, the pound came under pressure after official data showed that retail sales in the U.K. fell by a seasonally adjusted 0.8% in October, compared to expectations for a 0.1% fall.

The yen also came under selling pressure after Shinzo Abe, the head of Japan's main opposition party and frontrunner in next month's election, called for aggressive monetary easing by the Bank of Japan to support growth.

In latest news, the Federal Reserve Bank of Philadelphia’s general economic index decreased to minus 10.7 in November from 5.7 a month earlier. A reading of zero is the dividing line between expansion and contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware.

Later in the day, the speech by Federal Reserve Chairman Ben Bernanke is to be closely watched for any indications on the future possible direction of monetary policy.