Thursday, 26 Aug 2010

Dollar Under Pressure Ahead of Jobless Claims

The U.S. dollar slipped against its major rivals in trading Thursday against most major currencies as Asian and European stocks advanced, damping demand for the currency as a safe haven. The greenback however pared its recent losses against the Japanese yen on speculation that Japan could take direct steps to stem its currency's recent rise. Against the euro, the greenback fell 0.3% to $1.2695 having slipped from a 6-week high of $1.2588 hit earlier this week. Today's highlight will be the release of initial claims for U.S. state unemployment benefits by the Labor Department at 12:30 GMT. With the U.S. Commerce Department Wednesday reporting a disappointing 0.3% rise in durable goods orders for July, indicating a cut back in spending by businesses, traders will be keen to see if Thursday's initial claims number confirms that the U.S economic recovery has ground to a halt. Against the Japanese yen the dollar was up 0.25% at 84.77 yen after climbing as high as 84.89 yen earlier in the day. But despite recent gains in dollar/yen the currency may not rise above 85.00 yen even if data on U.S. weekly jobless claims comes in stronger than expected, analysts said. Economists expect jobless claims for last week to increase by 488,000, compared with a 500,000 rise in the previous week.