Investing.com - The Australian dollar fell on Thursday despite mildly upbeat data from a bank business survey and one on manufacturing in China.

AUD/USD traded at 0.8756, down 0.25%, while USD/JPY held at 107.26, up 0.10%.

Business confidence in Australia held at plus 3 in the third quarter, while conditions rose to plus 3 from plus 1 in the second quarter, according to a NAB survey. In China, the HSBC flash manufacturing index for October came in at 50.4, a nudge higher than 50.2 for the final in September.

 

"The HSBC China Manufacturing PMI improved to 50.4 in the flash reading for October - up from 50.2 in the final reading for September. Domestic as well as external demand showed some signs of slowing although both remained in expansion territory. Disinflationary pressures intensified as both the input and output price indices declined further," said Qu Hongbin, HSBC's chief China economist.

"While the manufacturing sector likely stabilized in October, the economy continues to show signs of insufficient effective demand. This warrants further policy easing and we expect more easing measures on both the monetary as well as fiscal fronts in the months ahead."

Earlier, New Zealand said third quarter CPI rose 0.3%, well below the 0.5% gain expected.

NZD/USD traded at 0.7841, down 1.11%.

Overnight, the dollar traded largely higher against most major currencies after U.S. inflation data met consensus forecasts, while expectations for the European Central Bank to loosen policy supported the unit further.

The Labor Department reported earlier that the U.S. consumer price index rose 0.1% in September, meeting estimates and following a 0.2% decline in August, which sent investors flocking to the greenback.

Year-over-year, consumer prices rose 1.7% in September, beating expectations for a 1.6% reading.

Core consumer prices, which exclude food and energy costs, rose 0.1% in September, disappointing expectations for a 0.2% gain. Core consumer prices were flat in August, though the overall report confirmed market expectations for the Federal Reserve to make monetary policy less accommodating going forward.

The euro, meanwhile, continued to come under pressure after Reuters reported earlier this week that the European Central Bank may purchase corporate debt to boost slowing inflation rates in the euro area and kick start recovery.

The report said the bank could activate the new stimulus plan as soon as December and begin bond purchases by early next year.

The ECB began purchasing covered bonds on Monday in a bid to increase liquidity in the region, and talk of fresh stimulus programs softened the euro.

An ECB spokesperson said no decision had been taken but the report was seen as an indication that the bank is moving closer to purchasing government debt.

Reports by Spanish news agency Efe that at least 11 European banks are set to fail ECB stress tests this weekend also hit demand for the euro.

The ECB was to announce the results of stress tests on 130 banks on Sunday.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.08% at 85.92.

On Thursday, the U.S. is to publish its weekly report on initial jobless claims.