By TraderVox.com
Tradervox.com (Dublin) – The dollar plunged to its weakest level in seven weeks against the euro after jobless claims data rose to the highest in a month. The data has spurred speculation of a potential third round of quantitative easing, which many economists are predicting will be made in the coming two months. The dollar had declined earlier against most of its counterparts as Federal Reserve and China indicated that they are prepared to make more monetary easing to spur economic growth in the respective countries. The euro’s advance was limited as Angela Merkel, the German Chancellor, reiterated that she will stand by her obligation to the 17-nation single currency bloc. She was talking to the press after meeting with French President Francoise Hollande in Berlin.
Talking about the Jobless Claims in US, Eric Viloria, a Senior Currency Strategist in New York at Gain Capital Group LLC, indicated that the figures were not what the market was expecting. The data has sparked speculation of QE3, but Eric said if there is any improvement in the coming Payrolls report, then this would be quelled. The payrolls report is due on September 7. The Jobless Claims data released yesterday by the Labor Department showed a rise of 4,000 to reach 372,000 against a market expectation of 365,000.
According to a report released by the Labor Department this month, employers increased their workforce by 163,000 in June, registering the biggest rise since February. The report also indicated an increase in Unemployment rate to 8.3 percent from 8.2 percent the previous month. The report by the department forced the dollar down by 0.3 percent against the euro to trade at $1.2564 at the close of trading yesterday in New York. The euro-dollar pair had reached 1.2590, which is the strongest level it had been since July 14. The greenback dropped by 0.1 percent against the yen to trade at 78.49 yen.
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