Thursday, 8 Apr 2010

Dollar Falls on Unemployment Claims Data

The dollar extended declines against the yen on Thursday after data showed U.S. initial jobless claims rose unexpectedly last week. 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 creates few new jobs to replace those lost during the recession. The USD is currently trading lower against the EUR by nearly 40 pips at 13330. It is also trading lower against the CHF and GBP.

More Americans unexpectedly filed claims for jobless benefits last week, a jump that may in part reflect difficulty in seasonally adjusting the data ahead of the Easter holiday. Initial jobless applications increased by 18,000 to 460,000 in the week ended April 3. The week leading up to Easter and the two weeks that follow are traditionally a volatile time for claims, a Labor Department analyst said, making it difficult to discern the underlying trend in applications.

Looking ahead to tomorrow, much vital data is expected from the leading economies. Traders are advised to pay special attention to two leading indicators, the British PPI Input Industrial and Canadian Employment Change. A positive end result of each of these indicators is likely to strengthen the local currency the CAD and GBP.