Investing.com - The U.S. dollar turned lower against its major counterparts on Thursday, following the release of disappointing U.S. data, but concerns over elevated Spanish and Italian borrowing costs continued to support safe haven demand for the greenback.
During U.S. morning trade, the dollar was lower against the euro, with EUR/USD rising 0.30% to hit 1.2594.
The U.S. Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week increased to 386,000, disappointing expectations for a decline of 5,000 to 375,000.
The previous week’s figure was revised up to 380,000 from a previously reported 377,000.
A separate report showed that U.S. consumer price inflation was up 0.2% in May, but core consumer prices fell 0.3%, the sharpest monthly decline since December 2008.
Bu the euro remained vulnerable as the yield on Spanish 10-year bonds was at 6.92%, after briefly breaking through the critical 7% threshold earlier, a level widely seen as unsustainable in the long run.
The spike in borrowing costs came one day after ratings agency Moody’s cut Spain’s credit rating by three notches to just above junk status and warned that further cuts were possible.
Earlier Thursday, Italy sold the maximum targeted amount of EUR4.5 billion of government bonds, but the country’s three-year borrowing costs jumped to the highest level since December, pressure higher by concerns over sovereign debt contagion.
Meanwhile, investors remained jittery ahead of Sunday’s closely watched general election in Greece, amid fears that a win for anti-bailout parties could precipitate a Greek exit from the euro zone.
The greenback was lower against the pound, with GBP/USD up 0.23% to hit 1.5541.
Elsewhere, the greenback was lower against the yen and the Swiss franc, with USD/JPY shedding 0.27% to hit 79.26 and USD/CHF losing 0.28% to hit 0.9536.
The Swiss National Bank left its benchmark interest rate on hold following its policy meeting earlier and reiterated that it was prepared to buy foreign currency in “unlimited quantities” in order to defend the 1.20 minimum exchange rate imposed on the euro in September.
The greenback was also weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD shedding 0.52% to hit 1.0247, AUD/USD climbing 0.51% to hit 0.9983 and NZD/USD jumping 1.19% to hit 0.7814.
The kiwi found support earlier after the Reserve Bank of New Zealand left its benchmark interest rate unchanged at 2.50%.
Elsewhere, the Canadian dollar shrugged off official data showing that domestic house prices rose slightly less-than-expected in April, climbing 0.2%, following a 0.3% increase the previous month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.25%, to trade at 82.38.
Also Thursday, official data showed that the U.S. current account deficit widened to a seasonally adjusted USD137.3 billion in the first quarter, the largest deficit since the fourth quarter of 2008.
Analysts had expected the U.S. current account deficit to widen to USD132.3 billion in the three months to March.
During U.S. morning trade, the dollar was lower against the euro, with EUR/USD rising 0.30% to hit 1.2594.
The U.S. Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week increased to 386,000, disappointing expectations for a decline of 5,000 to 375,000.
The previous week’s figure was revised up to 380,000 from a previously reported 377,000.
A separate report showed that U.S. consumer price inflation was up 0.2% in May, but core consumer prices fell 0.3%, the sharpest monthly decline since December 2008.
Bu the euro remained vulnerable as the yield on Spanish 10-year bonds was at 6.92%, after briefly breaking through the critical 7% threshold earlier, a level widely seen as unsustainable in the long run.
The spike in borrowing costs came one day after ratings agency Moody’s cut Spain’s credit rating by three notches to just above junk status and warned that further cuts were possible.
Earlier Thursday, Italy sold the maximum targeted amount of EUR4.5 billion of government bonds, but the country’s three-year borrowing costs jumped to the highest level since December, pressure higher by concerns over sovereign debt contagion.
Meanwhile, investors remained jittery ahead of Sunday’s closely watched general election in Greece, amid fears that a win for anti-bailout parties could precipitate a Greek exit from the euro zone.
The greenback was lower against the pound, with GBP/USD up 0.23% to hit 1.5541.
Elsewhere, the greenback was lower against the yen and the Swiss franc, with USD/JPY shedding 0.27% to hit 79.26 and USD/CHF losing 0.28% to hit 0.9536.
The Swiss National Bank left its benchmark interest rate on hold following its policy meeting earlier and reiterated that it was prepared to buy foreign currency in “unlimited quantities” in order to defend the 1.20 minimum exchange rate imposed on the euro in September.
The greenback was also weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD shedding 0.52% to hit 1.0247, AUD/USD climbing 0.51% to hit 0.9983 and NZD/USD jumping 1.19% to hit 0.7814.
The kiwi found support earlier after the Reserve Bank of New Zealand left its benchmark interest rate unchanged at 2.50%.
Elsewhere, the Canadian dollar shrugged off official data showing that domestic house prices rose slightly less-than-expected in April, climbing 0.2%, following a 0.3% increase the previous month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.25%, to trade at 82.38.
Also Thursday, official data showed that the U.S. current account deficit widened to a seasonally adjusted USD137.3 billion in the first quarter, the largest deficit since the fourth quarter of 2008.
Analysts had expected the U.S. current account deficit to widen to USD132.3 billion in the three months to March.