RTTN:Dollar Strengthens As Jobless Claims Drop More Than Forecasts
The US dollar remained firmer in early deals Thursday on signs of improvement in the labor market as the first time claims in the previous week dropped more than economists had expected.
After reporting a notable increase in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing that initial jobless claims pulled back by more than expected in the week ended July 13th.
The report said initial jobless claim fell to 334,000, a decrease of 24,000 from the previous week's revised figure of 358,000. Economists had been expecting jobless claims to dip to 345,000 from the 360,000 originally reported for the previous week.
Traders are now shifting their focus to Bernanke's second-day testimony, with the Chairman scheduled to speak before the Senate Banking Committee at 10:30 am ET.
His prepared remarks are likely to be same as his House testimony, with traders likely to keep an eye on the question-and-answer portion of his appearance. He clarified yesterday that there is no 'preset' timetable for rolling back bond purchase.
Traders will also look for the results of the Philadelphia Federal Reserve regional manufacturing survey for July at 10:00 am ET. The consensus estimates call for a decline in the manufacturing index to 9 from 12.5 in June.
Around the same time, the Conference Board will release its report on leading economic indicators index for June. Economists expect the index to rise by 0.3 percent from a 0.1 percent increase in May.
Elsewhere, the U.K. retail sales volume, both excluding and including auto fuel, grew 0.2 percent each month-on-month in June, data from the Office for National Statistics showed today. Economists had forecast sales including auto fuel to grow 0.3 percent following a 2.1 percent rise in May.
The dollar advanced to a 2-day high of 1.3073 against the euro following the data, having rebounded from yesterday's failed test of 1.32 support. The near-term resistance for the greenback is seen around the 1.3050 area.
The US currency continued to stay above the psychologically important mark of 100.0 against the yen for the second consecutive session, hitting a 3-day high of 100.36 after the jobless claims report. The next probable resistance for the dollar-yen pair is seen around the 101.10 area.
The greenback strengthened to a 2-day high of 0.9463 against the Swiss franc, having appreciated by more than 1 percent from yesterday's fresh 3-week low of 0.9360. Further bullish extension could help the pair revisiting the next key resistance around the 0.95 level.
The dollar also advanced to 1.5192 against the pound, rebounding from the post-UK retail sales sell-offs below 1.5240. The next likely upside target for the dollar is seen around the 1.5160 area.
