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Forex - Dollar weakens ahead of release of May jobs report

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Shutterstock photo - The dollar fell against most major currencies on Thursday as investors avoided the greenback ahead of the release of the May unemployment report on Friday.

Weeks of conflicting data have investors unsure as to whether or not the Federal Reserve may wind down stimulus measures soon.

Stimulus tools such as the Fed's monthly USD85 billion bond-buying program weaken the greenback to spur recovery.

Fed officials have said they will pay close attention to the labor market before deciding on any policy shifts.

In U.S. trading on Thursday, EUR/USD was up 1.16% at 1.3243.

In the U.S. earlier, the Department of Labor said the number of people who filed for unemployment assistance last week fell by 11,000 to 346,000 compared to expectations for a decline of 12,000 to 345,000.

Jobless claims for the preceding week were revised up to 357,000 from a previously reported increase of 354,000.

The data clouded market expectations as to when the Federal Reserve will begin to scale back stimulus measures.

Weeks of stronger-than-expected economic indicators have sent the dollar gaining at times on hopes the Fed will let the U.S. economy stand on its own two feet, while disappointing figures have had the opposite effect.

Investors avoided the greenback ahead of Friday's release of official unemployment figures, while the euro saw demand after the European Central Bank hiked its 2014 growth forecast.

The ECB left its benchmark interest rate unchanged at 0.5% and left deposit rates at zero.

ECB President Mario Draghi said the eurozone economy should contract by 0.6% in 2013 compared with a 0.5% contraction forecast made in March.

However, the European monetary authority hiked its 2014 growth forecast to 1.1% from 1.0%, which gave the euro support.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 1.30% at 1.5607.

In the U.K. earlier, the Bank of England left benchmark interest unchanged at 0.5% and made no changes to policy.

The dollar was down against the yen, with USD/JPY down 2.03% at 97.05, and down against the Swiss franc, with USD/CHF trading down 1.33% at 0.9298.

The yen served as the safe-haven of choice amid the dollar's decline amid views the Japanese currency is oversold.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.82% at 1.0259, AUD/USD up 0.70% at 0.9609 and NZD/USD trading up 0.75% at 0.8030.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 1.28% at 81.51.

On Friday, investors will trade on May's nonfarm payroll numbers and the headline unemployment rate. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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.

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