The dollar is losing ground against both the Euro and the British pound Thursday afternoon, but is holding onto a slight gain against the Japanese Yen. The U.S. currency began to fall against its major European rivals after weekly jobless claims logged an unexpected increase this morning.
A day before the release of the closely watched monthly jobs report, the Labor Department released a report on Thursday showing that first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended February 27th.
The report said initial jobless claims rose to 278,000, an increase of 6,000 from the previous week’s unrevised level of 272,000. The modest increase in jobless claims came as a surprise to economists, who had expected claims to edge down to 270,000.
Labor productivity in the U.S. fell less than previously estimated in the fourth quarter of 2015, according to a report released by the Labor Department on Thursday. The report said productivity fell by 2.2 percent in the fourth quarter compared to the previously reported 3.0 percent decrease. Productivity had been expected to be revised to show a steeper 3.2 percent drop.
The report also said the increase in unit labor costs in the fourth quarter was downwardly revised to 3.3 percent from 4.5 percent. Economists had expected an upward revision to 4.7 percent.
Activity in the U.S. service sector grew at a slightly slower rate in the month of February, the Institute for Supply Management revealed in a report on Thursday.
The ISM said its non-manufacturing index edged down to 53.4 in February from 53.5 in January, although a reading above 50 indicates continued growth in the service sector. Economists had expected the index to dip to 53.1.
The dollar has dropped to a 4-session low of $1.0960 against the Euro Thursday afternoon, from around $1.0860 this morning.
Eurozone retail sales grew at a slower pace in January largely reflecting a slowdown in food sales, Eurostat reported Thursday. Retail sales climbed 0.4 percent on a monthly basis after rising by revised 0.6 percent in December. Nonetheless, the pace of growth was better than an expected 0.1 percent rise.
Eurozone private sector growth eased to a 13-month low in February but the slowdown was less severe than initially estimated, final data from Markit showed Thursday. The composite output index slid to 53 in February from 53.6 in January. This was the lowest score since January 2015 but slightly above the flash score of 52.7.
The French jobless rate dropped slightly in the fourth quarter, the statistical office Insee reported Thursday. The ILO jobless rate for metropolitan France and overseas departments slid to 10.3 percent from 10.4 percent in the third quarter. It was forecast to rise to 10.5 percent.
The buck has fallen to over a 1-week low of $1.4160 against the pound sterling this afternoon, from an early high of $1.4032.
The British service sector expanded at the weakest pace in nearly three years in February, suggesting that concerns about “Brexit” and global growth weighed on orders and activity, a private survey revealed Thursday.
The Chartered Institute of Procurement & Supply/Markit services Purchasing Managers’ Index dropped to 52.7 in February from 55.6 in the previous month. This was the lowest score since March 2013. Economists had expected the index to fall marginally to 55.1.
U.K. house price inflation accelerated to its fastest pace in 10 months in February after easing slightly in the previous month, but the pace was less-than-expected, survey figures from the Nationwide Building Society showed Thursday.
The house price index rose 4.8 percent year-on-year following 4.4 percent increase in January. Economists had forecast a slightly higher figure of 4.9 percent.
U.K. house price annual inflation remained unchanged in February, defying expectations for an acceleration as prices fell from the previous month, survey data from the mortgage lender Halifax showed Thursday.
The Halifax house price index rose 9.7 percent year-on-year, the same as in January. Economists had forecast 10.4 percent increase.
Bank of Japan Deputy Governor Hiroshi Nakaso said structural reforms are now required to bring the economy back on sustainable growth path.
“Monetary policy to overcome deflation and the structural reform to raise the potential growth rate must be pursued in tandem to bring Japan’s economy back on track toward sustained growth,” Nakaso told business leaders in Okinawa.
“The Bank of Japan has taken monetary easing one step further by introducing “QQE with a Negative Interest Rate,” he added.
The greenback climbed to an early high of Y114.268 against the Japanese Yen Thursday, but has since pulled back to around Y113.575.
The services sector in Japan continued to expand in February, albeit at a slower pace, the latest survey from Nikkei showed on Thursday with a PMI score of 51.2. That’s down from 52.4 in January, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.
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