The US Dollar came under some serious pressure last night as the FOMC published dovish policy meeting minutes, but the GBP to USD exchange rate trimmed gains after US jobless claims declined.
Shortly after the North American trading session opened the US Dollar advanced from recent lows against several of its major rivals as US initial jobless claims climbed by less than expected in the week ending April 5th.
First time applications for employment benefits increased by the least since mid-2007, coming in at 300,000 rather than the 320,000 expected.
The previous week’s figure was negatively revised to 332,000.
Continuing claims in the week ending March 29th came in at 2776K, down from 2838K.
The report supports the case for the Federal Reserve continuing with the steady tapering of stimulus while keeping interest rates at record lows.
According to Bloomberg News, one industry expert said of the data; ‘We’re moving in the right direction. The underlying trend for claims is a gradual drift lower. Looking at the entire history of claims, you don’t get too far beyond this level, even in a very healthy economy.’
Separate figures showed a fourth monthly increase in US import prices, with the gauge up 0.6 per cent from the previous month.
On the year the import price index was down by 0.6 per cent, less than the 0.9 per cent drop expected.
The ‘Greenback’ strengthened against peers like the Pound, Euro and Canadian Dollar after the data was released.
The US Dollar’s stronger position against the Pound was also aided by the Bank of England’s decision to refrain from altering fiscal policy.
Although recent UK data has been generally positive, the BoE continues to take a cautious approach and advocate the need for ongoing accommodative stimulus.
Overnight Chinese inflation figures are likely to be the main cause of currency market movement.
Tomorrow influential economic data is comparatively thin on the ground, but US Dollar fluctuations could occur before the weekend if the University of Michigan confidence index delivers a surprise result.
Economists expect the measure to have advanced from 80 to 81 in April.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5965,
US Dollar,,Canadian Dollar,1.0915,
US Dollar,,Euro,0.7213,
US Dollar,,Australian Dollar,1.0635,
US Dollar,,New Zealand Dollar,1.1486 ,
Canadian Dollar,,US Dollar ,0.9163,
Pound Sterling,,US Dollar,1.6760,
Euro,,US Dollar,1.3862,
Australian Dollar,,US Dollar,0.9403,
New Zealand Dollar,,US Dollar,0.8695 ,
[/table]
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