Thursday, 21 Apr 2011

Dollar Gains before Holiday

In a quiet US trading session, weaker than expected US unemployment claims and manufacturing data gave traders an excuse to book gains in short dollar positions before the long holiday weekend.

The dollar gained ground heading into the long weekend after higher than forecasted unemployment claims were released. Weekly new job claims rose to 403K on expectations for only 394K. The previous week's report was revised higher to 416K from 412K and only served to highlight the negative tone of the release. Also adding to the negative tone in the afternoon was a lower than expected Philly Fed Manufacturing Index which came in at 18.5 on expectations of 37.1.

Following the jobs data the dollar buying increased and the EUR/USD fell to a daily low of 1.4532 before trading back near the 1.4545 level. Earlier in the European trading session the pair traded as high as 1.4648. The GBP/USD traded as high as 1.6600 before trading back to 1.6521. The USD/CAD rose to its high of 0.9534 after weaker than expected retail sales of 0.4% on forecasts of 0.6%.

Tomorrow Australian, New Zealand and most European markets will be closed due to the Easter holiday. Trading will commence in Asia and the States but liquidity will be light throughout the day.

Happy Holidays