Thursday, 9 Sep 2010

Dollar Rises After Better-Than-Expected Jobless Data

The U.S dollar pared losses against the euro and the Japanese yen after data on U.S. ‎initial weekly jobless claims and international trade eased concerns about the pace of the ‎U.S. economic recovery. The Department of Labor said Thursday that initial claims for ‎regular state unemployment insurance benefits fell 27,000 to 451,000 last week.‎ The July improvement in the trade balance is a positive for the third quarter data outlook ‎and diminishes somewhat the fears of a drastic slowdown in the United States, analysts ‎said. And the jobless claims data is an even more significant move in the right direction. ‎ Throughout the financial crisis and its bumpy recovery, the dollar has tended to benefit ‎from safe-haven demand - rising when U.S. economic prospects look bleak and falling ‎when optimistic investors flock to currencies with higher yields, such as the euro.‎ Traders said that the simultaneous release of trade data with the jobless claims numbers ‎had a positive effect on the greenback. The U.S currency may reach the $1.2190 level ‎within weeks should it fall below a key support level of $1.2580 against the euro. ‎