Investing.com - The euro was trading near four-month highs against the dollar on Thursday after data showing a decline in U.S. jobless claims last week was overshadowed by falling producer prices.
EUR/USD hit highs of 1.1444, the most since February 19 and was last at 1.1400, up 0.42% for the day.
The Department of Labor said the number of Americans filing claims for initial jobless benefits in the week ending May 9 fell by 1,000 to a seasonally adjusted 264,000, coming in just above the 15 year low reached two weeks ago, indicating that the recovery in the labor market is continuing.
Analysts had expected jobless claims to increase to 275,000.
In another report the Labor Department said the producer price index fell 0.4% last month and was 1.3% lower on a year-over-year basis, the largest drop since 2010.
The weak inflation data reinforced expectations that the Federal Reserve will hold off on raising interest rates until the economic recovery is on a stronger footing.
Recent figures showed that the U.S. economy expanded just 0.2% in the first quarter and data on Wednesday showing that U.S. retail sales failed to rise in April disappointed hopes for a rebound in second quarter growth after the sharp slowdown in the first three months of the year.
The single currency was also boosted as German and U.S. bund yields rose to the highest level in five months earlier as a broad based selloff in global bond markets continued.
German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar. Yields rise as prices fall.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit fresh four-month lows of 93.81 following the economic reports before pulling back to 93.44.