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Dollar trims gains as focus turns to nonfarm payrolls

Published 08/06/2015, 10:47 AM
© Reuters.  Dollar index pulls away from session highs ahead of U.S. jobs report
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Investing.com - The dollar trimmed gains against the other major currencies on Thursday, as investors turned their attention to Friday's nonfarm payrolls data for further indications on potential September rate hike in the U.S.

EUR/USD edged up 0.11% to 1.0915.

The dollar strengthened earlier, after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 1 rose by 3,000 to 270,000 from the previous week’s total of 267,000.

Analysts had expected initial jobless claims to rise by 6,000 to 273,000 last week.

The dollar was higher against the pound, with GBP/USD down 0.56% at 1.5515.

The pound weakened after the minutes of the Bank of England’s August meeting showed that just one monetary policy committee member voted in favor of a rate hike this month.

The minutes said the bank now expects inflation to remain at around zero for at least the next two months, before rising to its 2% target at the end of two-year forecast period, if interest rates are increased in line with the market’s expectations.

Sterling recovered some ground however after BoE Governor Mark Carney said it was his personal view that the decision on when to start to raise interest rates was likely to come into sharper relief at the turn of the year.

He also reiterated that interest rate increases will be “gradual and limited and added that the “path is more important than the timing of the first increase”.

Earlier in the day, data showed that U.K. manufacturing production increased by 0.2% in June, matching expectations and following a decline of 0.6% in May.

The report also showed that U.K. industrial production fell by 0.4% in June, disappointing expectations for a gain of 0.1%, after increasing 0.3% in the preceding month.

Elsewhere, the dollar was steady against the yen, with USD/JPY at 124.79 and was higher against the Swiss franc, with USD/CHF adding 0.26% to 0.9816.

The Australian dollar was lower, with AUD/USD slipping 0.14% to 0.7346, while NZD/USD gained 0.47% to 0.6544.

Earlier Thursday, data showed that the number of employed people in Australia rose by 38,500 in July, beating expectations for an increase of 10,000. The number of employed people ose by 7,000 in June, whose figure was revised from a previously estimated gain of 7,300.

The report also showed that Australia's unemployment rate ticked up to 6.3% last month from 6.1% in June, whose figure was revised from a previously estimated rate of 6.0%. Analysts had expected an unemployment rate of 6.0% in July.

Meanwhile, USD/CAD edged down 0.12% to 1.3161, still close to Wednesday's 11-year peak of 1.3214.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 97.97.

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