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Dollar holds onto gains despite jobless claims report

Published 05/12/2016, 08:57 AM
© Reuters.  Dollar remains higher against rivals despite U.S. data
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Investing.com - The dollar held onto gains against the other major currencies on Thursday, even after data showed that U.S. jobless claims rose unexpectedly last week.

USD/JPY was up 0.71% at 109.17.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 6 increased by 20,000 to 294,000 from the previous week’s total of 274,000. Analysts had expected jobless claims to drop by 4,000 to 270,000 last week.

Meanwhile, sentiment on the yen remained fragile since Japanese Finance Minister Taro Aso said on Monday that financial authorities are prepared to intervene in the currency market if excessive moves in the yen are enough to affect the country’s economy.

However, Bank of Japan Governor Haruhiko Kuroda said earlier Thursday that it would be difficult for Japan's finance ministry to intentionally weaken the yen to boost exports.

EUR/USD slipped 0.21% to 1.1402.

The dollar was lower against the pound and the Swiss franc, with GBP/USD up 0.22% at 1.4478 and with USD/CHF edging down 0.14% to 0.9695.

Sterling strengthened after the Bank of England said it was holding the benchmark interest rate at 0.50%, in a widely expected move. The rate has been held at that record-low level since March 2009.

The central bank also said it was to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.

All nine MPC members were in favor of holding the central bank's monetary policy.

In the separately released inflation report, the BoE cut its growth forecast for the second quarter to 0.3%, compared to the prior estimate of a 0.5% expansion.

For 2016, the central bank lowered its estimate for growth to 2.0%, from the prior 2.2%.

Speaking shortly after, BoE Governor Mark Carney warned that the upcoming June 23 referendum on the U.K.’s European Union membership had “pushed up uncertainty measures to levels not seen since the euro zone crisis” and defined the vote as the “elephant in the room”.

The Australian dollar was lower, with AUD/USD down 0.47% at 0.7341, while NZD/USD added 0.12% to 0.6827.

Elsewhere, USD/CAD fell 0.28% to trade at 1.2811.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.16% at 93.95.

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