News Column

Dollar strengthens despite dismal jobless claims data

January 31, 2014

The U.S. dollar advanced versus a basket of major currencies despite a report showing higher than forecast initial jobless claims. Americans asking for jobless benefits rose to 348,000 from a revised of 329,000, while analysts predicted a rise to 330,000. The focus in the coming period will remain on economic data from the United States as it will determine the pace at which the Fed would cut its monthly bond purchases. Later in the day, U.S. pending home sales may show 0.3 percent drop in December after advancing 0.2 percent in November. The Fed announced on Wednesday it will slash another $10 billion from its monthly bond purchases to $65 billion . Policymakers decided to extend their stimulus cut for a second month despite concerns from emerging economies from the Fed's stimulus scale back. The effect of the decision started to weigh on movements today, giving support to the green currency which strengthened ignoring the dismal jobless claims figures. The dollar index, which tracks the dollar's movements versus a basket of major currencies, climbed to hit a peak of 81.11 from the session's low of 80.62. Against the yen, the dollar rebounded to take the pair up to a high of 102.78 after setting a bottom of 102.07. The EURUSD retreated for a fifth straight session to hover around 1.3579 despite a report showing a rise in euro area economic confidence for a ninth month in January. The British pound also dropped against the dollar, but the pair managed to recuperate some of its losses as it pulled back from a low of 1.6443 to trade around 1.6513.

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Source: Financial Markets

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