🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

FOREX-Dollar higher after U.S. weekly jobless claims data

Published 11/12/2009, 09:54 AM
Updated 11/12/2009, 09:57 AM

* Dollar higher after U.S. initial weekly claims data

* APEC ministers to call for "market-oriented" forex rates

* Pound continues to struggle (Recasts, updates prices, adds detail)

NEW YORK, Nov 12 (Reuters) - The dollar gained on Thursday with the advance bolstered by a U.S. report showing initial U.S. weekly jobless claims were lower than expected.

The weekly report has had greater impact on trading in recent months because of investor concern that the U.S. economic recovery will be tepid and create few new jobs to replace those lost during the recession.

The U.S. Labor Department reported that initial state jobless benefit claims fell to 502,000 in the latest week from a revised 514,000 in the prior week. The consensus forecast was for initial claims of 510,000.

With the release of the U.S. data, investors now shift their focus to a meeting of Asia-Pacific nations and other Asian regional issues, including a U.S. state visit to China next week.

"Dollar/yen perked up a little bit on the news which is no real surprise considering that jobless claims continue to fall, which is encouraging," said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.

In early New York trade, the dollar was up 0.6 percent at 90.35 yen. The euro was down 0.4 percent at $1.4923 after touching $1.5049 on trading platform EBS on Wednesday. Analysts said some of the euro weakness was technical after it failed to break through resistance and hold above $1.5000.

The dollar index a gauge of the greenback's performance against six major currencies, was at 75.359, up 0.3 percent on the day. It hit a fresh 15-month low of 74.774 on Wednesday.

Sterling struggled on the back of comments from the Bank of England on its quantitative easing programme in the previous session though it was off the session low. Sterling was last little changed at $1.6560.

DOLLAR WEAKNESS

But the steady pace of dollar selling in recent weeks -- on the view U.S. interest rates would remain low for some time -- remained intact analysts said, adding that Thursday's rally was little more than a consolidation.

The latest draft of a post-meeting communique from Asian Pacific Economic Cooperation leaders called for "market-oriented" exchange rates and interest rates -- effectively an argument for local currencies to appreciate against the dollar.

Some analysts said the focus on Asian currencies was also a factor capping gains in the euro on Thursday.

Pressure on China and other Asian countries to revalue their currencies "could take away some of the upside pressure on the euro," said Marcus Hettinger, currency strategist at Credit Suisse in Zurich.

CHINA CHANGES

In other news, China's central bank, which holds the world's largest foreign exchange reserves stash of more than $2 trillion, on Wednesday said it would consider major currencies in guiding the yuan, suggesting a departure from an effective dollar peg that has been in place for more than a year.

Analysts said the move was Beijing's clearest signal yet that it was close to letting the yuan appreciate after an 18-month hiatus that has frustrated many of its peers.

"The message we draw from the shift in the (Chinese central bank's) carefully chosen words is that trend decline in the dollar will no longer be resisted to the same degree," said Westpac in a research note.

"We expect greater movement on dollar/yuan soon, quite possibly ahead of Obama's meetings with top Chinese officials next week and with a European delegation also arriving in China before year-end," they said.

U.S. President Barack Obama visits China next week, and market participants expect currencies to be discussed.

(Additional reporting by Wanfeng Zhou in New York and Matthew Foster-Smith in London) (Reporting by Nick Olivari; Editing by Theodore d'Afflisio)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.