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Forex - Dollar gains as jobless claims make unexpected dive

Published 05/02/2013, 03:15 PM
Updated 05/02/2013, 03:16 PM
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Investing.com - The U.S. dollar firmed against most major currencies on Friday after data revealed that the number of Americans seeking unemployment assistance for the first time last week made a surprising decline.

In U.S. trading on Wednesday, EUR/USD was down 0.93% at 1.3057.

In the U.S. earlier, Department of Labor reported earlier that the number of people filing for initial jobless claims last week fell to 324,000, a five-year low, from 342,000 the week before.

Analysts were expecting the figure to rise slightly and come in at 345,000 claims.

The numbers strengthened the dollar by fanning hopes that the official April jobs report due out Friday won't disappoint as much as many have feared in recent sessions.

Weaker-than-expected data in the U.S. often stokes fears that the Federal Reserve won't rush to unwind stimulus programs, including its USD85 billion monthly asset-purchasing program, which weaken the greenback to spur recovery.

Elsewhere, the European Central Bank earlier cut interest rates to 0.50% from 0.75%, which came as little surprise to most market participants, though comments from ECB President Mario Draghi afterwards suggesting that the monetary authority may charge banks to hold excess reserves sent the euro dropping and further bolstered the greenback's appeal.

The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.16% at 1.5532.

The dollar was up against the yen, with USD/JPY up 0.50% at 97.89, and up against the Swiss franc, with USD/CHF trading up 0.86% at 0.9353.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.07% at 1.0075, AUD/USD down 0.21% at 1.0255 and NZD/USD trading down 0.02% at 0.8498

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.80% at 82.30.
 
On Friday, the U.S. will unveil government data on nonfarm payrolls and the unemployment rate as well as data on average hourly earnings and factory orders.

In addition, the ISM is to release data on U.S. service-sector activity, a leading economic indicator.








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