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Dollar remains higher despite U.S. jobless claims

Published 05/05/2016, 08:41 AM
© Reuters.  Dollar holds onto gains as markets focus on Friday jobs data
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Investing.com - The dollar remained higher against the other major currencies on Thursday, despite the release of disappointing U.S. jobless claims data as investors began to turn their attention to Friday’s key employment report.

USD/JPY was steady at 107.02, after hitting highs of 107.40 earlier in the day.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending April 29 increased by 17,000 to 274,000 from the previous week’s total of 257,000.

Analysts had expected jobless claims to rise by 3,000 to 260,000 last week.

Market participants were looking to Friday’s U.S. nonfarm payrolls data after payroll processing firm ADP said on Wednesday that non-farm private employment rose by 156,000 last month, missing expectations for an increase of 196,000.

The weak data was offset however by data showing that the U.S. trade deficit narrowed to $40.44 billion in March from $46.96 billion in February.

In addition, the Institute of Supply Management said its non-manufacturing purchasing manager's index improved to a four-month high of 55.7 last month from 54.5 in March.

EUR/USD dropped 0.51% to 1.1425.

The dollar was steady against the pound, with GBP/USD at 1.4504 and pushed higher against the Swiss franc, with USD/CHF gaining 0.67% to 0.9639.

Research group Markit reported on Thursday that its U.K. services PMI fell to 52.3 in April from 53.7 the previous month.

It was the lowest level since February 2013 and was below economists’ expectations for a reading of 53.5.

The report came after similar surveys of the manufacturing and construction sectors earlier in the week pointed to slowing growth at the start of the second quarter.

The Australian and New Zealand dollars were stronger, with AUD/USD advancing 0.62% at 0.7503 and with NZD/USD gaining 0.48% to 0.6915.

Earlier Thursday, the Australian Bureau of Statistics said retail sales rose by 0.4% in March, beating expectations for a 0.3% gain, after an uptick of 0.1% in February.

Data also showed that Australia’s trade deficit narrowed to A$2.163 billion in March from A$3.044 billion in February. Analysts had expected the trade deficit to narrow to A$2.900 billion un March.

In other news, Australia Treasurer Scott Morrison said in a statement on Thursday that Philip Lowe will be replacing Glenn Stevens as governor of the Reserve Bank of Australia for a seven-year term on September 18.

Elsewhere, USD/CAD declined 0.50% to 1.2808.

Statistics Canada said building permits dropped by 7.0% in March, compared to expectations for a 5.0% decline. Building permits increased by 15.3% in February, whose figure was revised from a previously estimated 15.5% climb.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.26% at 93.51, the highest since April 29.

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