The US dollar traded on much optimistic sentiments on Thursday after the news of reduced jobless claims for the current week as per latest data released by US Labor Department. According to the report jobless benefit claims increased by 18,000 to 409,000 in the last week. The figure of jobless claims has reduced in the current week which was already expected by several economists.
The dollar index DXY which measures the US dollar’s performance versus the its major six rivals surged to 80.789 from 80.246 on Wednesday which happens to be its highest in last two weeks.
Director of currency research Kathy Lien from GFT commented, “The dollar has rallied significantly and the sustainability of its gains hinges upon Friday’s nonfarm payrolls report.”
She further added, “The only reason why investors bought dollars over the past week is in anticipation of strong job growth so if payrolls disappoint, the dollar will come crashing down, yet given the low level of jobless claims and the strength of the ADP employment report, the dollar rallied today because the risk of a shortfall is small while the risk of a blowout number is large.”
The Euro declined to 1.3017 versus the US dollar as compared to $1.3153 on Wednesday’s late trading session. Euro gained earlier this week but witnessed the correction due to rising concerns over European Commission’s plan to opt for writing down of senior bondholders in case of any future bank failures as per EU’s new consultation paper.
The British Pound also declined to 1.5475 versus the greenback as compared to 1.5498 on Wednesday’s late trading session. The British Pound remained under severe selling pressure on weak UK’s economic data.
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Daily forex trading news written by Rehan from DailyForexTrade.com