Saturday, September 23, 2023

Dollar declines after US claims for unemployment benefits rise

The dollar fell on Thursday after data showed U.S. jobless claims rose more than expected last week, although markets were generally more positive about inflation data and the Fed’s interest rate decision next week. The week was seen as consolidating.

* In the week ending June 3, initial claims for state unemployment benefits rose by 28,000, to a seasonally-adjusted 261,000, according to the Labor Department. Economists polled by Reuters had estimated 235,000.

* Mark Chandler, chief market strategist at Bannockburn Global Forex in New York, said: “Fills were a little higher than expected, but we’re still in consolidation mode…we’re stuck right now.”

* The greenback has been buoyed by expectations that the Federal Reserve will raise rates in July, although it is generally expected to hold off on raising rates after its meeting on June 13-14.

* However, worsening economic data may also limit how high the US central bank can hike rates, even if inflationary pressures remain strong.

* “There’s a small opportunity for the Fed to raise rates again in June or July, and the market is now heading for July (…), the market doesn’t think there’s anything else to do because the economy looks like it’s It’s going to weaken,” Chandler said.

* The euro was last up 0.75% at $1.0779. Europe’s single currency strengthened in the first three months of 2023 despite data suggesting the euro zone economy may be in a technical recession.

* The greenback fell 0.87% to 138.94 yen.

* The dollar index, which measures the currency against six others, fell 0.67% to 103.33 after hitting a session’s low of 103.29.

World Nation News Desk
World Nation News Desk
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