The US dollar was able to halt its drop today as the unexpected slump of jobless claims reignited speculations about possible quantitative easing tampering from the Federal Reserve. The currency was not able to rise versus the Japanese yen.
Claims for unemployment benefits decreased by as much as 31,000 to 292,000 last week, demonstrating the biggest drop since April 2006, instead of rising as was expected by economists. Many analysts were skeptical about the data. Two US states were upgrading their computer systems and this perhaps played part in the drop, preventing employment agencies from registering claims.
Whatever the reason for the good reading, it reinforced expectations for QE reduction next week. Employment data was a source for concern for some as the labor market was virtually the only sector of the US economy that was not showing signs of constant improvement. With the huge drop of unemployment claims, such worries eased.
EUR/USD was down from 1.3308 to 1.3296 as of 23:38 GMT today, but rebounded from the daily low of 1.3260. GBP/USD traded at 1.5802 following the drop from 1.5815 to 1.5773. At the same time, USD/JPY edged down from 99.86 to 99.54.
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