Dollar Weak as Jobless Claims Increased

By TraderVox.com

Tradervox (Dublin) – Traders are looking at the recent US jobless claims data to determine whether the recent break from the range of 350,000 to 365,000 is a trend or just a onetime event. The weekly jobless claims released yesterday showed that the jobless claims rose by most since January to hit 380,000. This is way beyond the market expectation of about 355,000 hence raising concerns whether this is a trend or it is a one off event. These concerns are fueled by the Friday’s Non-Farm Payroll data which was also as disappointing showing a rise of 120,000. However, the unemployment rate has not increased but rather has decreased to 8.2 percent from 8.3 percent.

After this report, the greenback fell against most major peers boosting sentiments that the monetary policy should remain accommodative for speedy economic recovery. As the US job report came out disappointing, the Australian labor report showed some hope with employment increase more than it had been estimated. This has led to the strengthening of the Aussie against the greenback in the following sessions. The dollar also decreased over comment by the Fed Vice Chairman Janet Yellen and New York Fed President William Dudley who supported the low interest rates.

The jobless claims report indicates that jobless claims for the week ended April 7 rose by 13,000 to hit the highest level since January 28. This has come barely a week after another disappointing report from the department of labor showing that the US Non-Farm payrolls expanded less than it had been estimated registering and increase of 120,000 in March against an estimate of 205,000.

After the jobless claim report, the US dollar declined by 0.5 percent against the euro to trade at $1.3178 during the New York session yesterday, the greenback had weakened by 0.2 percent the previous day. The greenback was unchanged against the Yen trading at 80.79 yen per dollar while the Japanese currency decreased against the euro by 0.5 percent to trade at 106.57 yen per euro. The back also declined against the sterling pound during the Asia session.

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