Dollar Maintains Advance Versus Euro as Jobless Claims Expected to Decline
The dollar held yesterday’s advance against the euro before reports economists said will show fewer Americans filed for unemployment benefits, indicating the labor market is recovering.
The greenback yesterday advanced from its lowest level in 15 months as President Barack Obama vowed to cut $4 trillion in cumulative deficits within 12 years. The yen rose against most of its major peers on speculation declines in equities and commodities this week have increased demand for safer assets.
“The dollar weakness story has just about run its course for this week,” said Tony Allen, global head of foreign- exchange trading in Sydney at Australia & New Zealand Banking Group Ltd., the nation’s third-largest lender by market capitalization.
The dollar traded at $1.4444 versus the euro at 8:34 a.m. in Tokyo, from $1.4443 yesterday, when it slid to $1.4520, matching the weakest level since January 2010. The greenback fetched 83.74 yen from 83.84. The euro declined to 120.95 yen from 121.08 yen.
The number of people filing first-time claims for unemployment insurance fell for a third week in the period to April 9, with applications declining to 380,000 from 382,000, according to a Bloomberg News survey of economists. Continuing claims for jobless benefits dropped 18,000 in the week ended April 2 to 3.71 million, according to a separate survey before the Labor Department report.
The dollar remained higher versus the euro yesterday after the Federal Reserve said in its Beige Book report that the economy expanded at a “moderate” pace across much of the U.S. in February and March, led by manufacturing. Labor markets showed improvements in most regions, the central bank said.
Dollar sentiment also will be driven by the Monetary Authority of Singapore’s policy review today, Allen said. The authority, which uses the currency to conduct monetary policy, is forecast in a Bloomberg survey to favor a stronger exchange rate.
“If they leave the band where it is, then basically there’s a whole lot of people short the U.S. dollar so there will be short-covering,” pushing the greenback up against Singapore’s dollar and other Asian currencies, he said. “Euro and Aussie will also go down.”
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