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Dollar remains higher as focus turns to U.S. nonfarm payrolls

Published 03/05/2015, 10:46 AM
Dollar holds gains vs. rivals despite weak U.S. data
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Investing.com - The dollar remained higher against a basket of other major currencies on Thursday, despite the release of downbeat U.S. jobless claims and factory orders data, as markets turned their attention to Friday's report on U.S. nonfarm payrolls.

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending February 28 increased by 7,000 to 320,000 from the previous week’s total of 313,000. Analysts had expected initial jobless claims to fall by 18,000 to 295,000 last week.

Separately, the U.S. Bureau of Labor Statistics said non-farm business sector labor productivity decreased by 2.2% in the final three months of 2014, better than expectations for a 2.3% decline and compared to a preliminary estimate of a 1.8% decline.

U.S. non-farm productivity rose by 3.7% in the third quarter.

Data also showed that U.S. factory orders slipped 0.2% in January, compared to expectations for a 0.2% rise. December's figure was revised to a 3.5% decline from a previously estimated 3.4% drop.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.28% to 96.25.

EUR/USD was down 0.30% to 1.1045 after the European Central Bank said it was maintaining its benchmark interest rate at a record-low 0.05%, in line with market expectations. The central bank also held its marginal lending at 0.30% and left its deposit facility rate unchanged at -0.20%.

ECB president Mario Draghi was to comment on the decision at a press conference later in the day. Draghi was expected to shed more light on how the bank will implement its €1.1 trillion quantitative easing program, which is due to start this month.

Earlier Thursday, data showed that German factory orders fell 3.9% in January, compared to expectations for a 1.0% decline. December's figure was revised to a 4.4% rise from a previously estimated 4.2% gain.

The dollar was higher against the yen and the Swiss franc, with USD/JPY up 0.30% to 120.06 and with USD/CHF climbing 0.52% to 0.9684.

In other trade, sterling edged lower, with GBP/USD slipping 0.18% to 1.5237 after the Bank of England left interest rates unchanged at their current record low of 0.50%, where they have been since March 2009. The central bank also maintained the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.

Industry data earlier showed that U.K. house prices declined by 0.3% last month, worse than expectations for a 0.2% drop. U.K. house prices increased 1.9% in January, downwardly revised from a previously reported gain of 2.0%.

U.K. house prices in the three months to February were 8.3% higher than in the same three months a year earlier, below forecasts for a gain of 8.5% gain and down from an increase of 8.5% in January.

The Australian and New Zealand were lower, with AUD/USD declining 0.47% to 0.7781 and NZD/USD tumbling 1.47% to 0.7478.

Meanwhile, USD/CAD rose 0.38% to trade at 12475 after the Richard Ivey School of Business said its purchasing managers' index for Canada rose to 49.7 last month from 45.4 in January, beating expectations for an increase 46.2.

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