Upbeat U.S. Unemployment Data Lift Dollar Against Rivals

Photo of author

By Brendel Balaga

The dollar outperformed rival currencies on Thursday, pulling away from a five-week low after surprisingly upbeat U.S. jobless claims data boosted investor confidence on the U.S. job market.

The Labor Department reported the number of applications for initial jobless benefits in the week ending June 4 went down by 4,000 to 264,000 from the previous week’s total of 268,000.

Analysts were expecting jobless claims to hit 270,000 last week.

USD/CAD went up 0.38% to trade higher 1.2741, bouncing back from Wednesday’s five-week trough of 1.2654.

The greenback plunged earlier in the week, as markets dialed back expectations on the timing of the next interest rate increase after data showed that jobs growth in May moved at the slowest pace since September 2010.

The dismal employment figures decreased the odds of a near-term rate increase by the U.S. central bank. The last time the Federal Reserve raised interest rates was in December last year, which was the first time in nearly 10 years.

EUR/USD declined 0.40% to trade lower at 1.1348.

In his speech at the Brussels Economic Forum, European Central Bank President Mario Draghi said that uncertainty over the future of the single currency is holding back progress in the Eurozone.

The American currency was stronger against the pound and the Swiss franc, with GBP/USD falling 0.24% at 1.4469 and with USD/CHF slumping 0.26% to 0.9616.

Investor confidence on sterling remained fragile Britain’s membership in the Europran Union hangs in the balance.

The Australian dollar was weaker against the greenback, with AUD/USD retreating 0.68% at 0.7438, while NZD/USD added 0.32% to trade at 0.7116. The kiwi gained broad support after the New Zealand Reserve Bank kept rates steady, pleasantly surprising market players who had been expecting an interest rate cut.

Elsewhere, USD/JPY declined 0.48% to trade at 106.49.

The U.S. dollar index went up 0.29% at 93.86, off Wednesday’s five-week lows of 93.41.

Images Courtesy of DepositPhotos