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Dollar gains on U.S. jobless claims report, though euro trims losses

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Investing.com -

Investing.com - The dollar traded higher against most major currencies on Thursday, buoyed by data revealed first-time jobless assistance claims fell to eight-year lows, though upbeat factory gauges in Europe sent the euro taking back earlier losses against the greenback.

In U.S. trading on Thursday, EUR/USD was up 0.01% at 1.3465.

The dollar firmed against the euro earlier after data revealed initial jobless claims in the U.S. fell to an eight-year low, though upbeat factory data out of Europe fueled demand for the single currency.

The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending July 19 declined by 19,000 to 284,000, down from the previous week's total of 303,000.

Analysts had expected jobless claims to rise by 5,000 to 308,000 last week, and the positive numbers fueled speculation that the Federal Reserve may hike interest rates sooner than markets once anticipated.

While the Fed is seen closing its monthly bond-buying stimulus program likely in October, uncertainty as to how much time will pass from that point until rate hikes begin makes the dollar move on both positive and negative indicators.

A separate report showed that U.S. new home sales dropped by 8.1% to 406,000 units last month, worse than expectations for a decline of 5.3%, pointing to underlying weakness in the housing sector, which capped the dollar's advance along with cheery European factory data.

A preliminary reading of the euro zone manufacturing purchasing managers' index rose to a two-month high of 51.9 for July, beating market calls for a 51.7 reading. The bloc's services PMI jumped to a 38-month high of 54.4, beating expectations for a 52.7 reading.

Private sector activity in Germany also expanded in July, with the country's services PMI jumping to a 37-month high. The French service sector also expanded this month, but the contraction in the country's manufacturing sector deepened.

Ongoing concerns that conflicts in Ukraine and Gaza will dampen global economic recovery weighed on both currencies.

The dollar was up against the yen, with USD/JPY up 0.32% at 101.81, and up against the Swiss franc, with USD/CHF up 0.03% at 0.9024.

The greenback was up against the pound, with GBP/USD down 0.34% at 1.6986.

The pound softened the Office for National Statistics reported that U.K. retail increased by 3.6% compared with June 2013 and by 0.1% compared with May 2014.

Markets were expecting a 3.9% yearly gain and a 0.3% monthly increase.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.15% at 1.0745, AUD/USD down 0.43% at 0.9417 and NZD/USD down 1.14% at 0.8574.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.09% at 80.95.

On Friday, the U.S. is to round up the week with data on durable goods orders.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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