The dollar is turning in a mixed performance Thursday, despite a dramatic drop in weekly jobless claims. The U.S. currency is down against the Euro and the Japanese Yen, but is holding its gains against the British pound.
In an upbeat sign for the job market, the Labor Department released a report on Thursday showing first-time claims for U.S. unemployment benefits tumbled to their lowest level in over forty years in the week ended July 18th.
The report said initial jobless claims dropped to 255,000, a decrease of 26,000 from the previous week’s unrevised level of 281,000. Economists had expected jobless claims to edge down to 279,000. With the much bigger than expected decrease, jobless claims fell to their lowest level since hitting 233,000 in November of 1973.
Pointing to continued strength in the economic outlook for the remainder of the year, the Conference Board released a report on Thursday showing another bigger than expected increase by its index of leading U.S. economic indicators.
The Conference Board said its leading economic index climbed by 0.6 percent in June following an upwardly revised 0.8 percent increase in May. Economists had expected the index to edge up by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.
Greece cleared another hurdle and stepped into the bailout zone after the government approved the second set of reform measures early Thursday, as Prime Minister Alexis Tsipras is seeking to close a deal that will offer up to EUR 86 billion debt even as the crisis struck country faces protests and violence.
The reforms, which is the final requirement before the country can start the bailout negotiations with its creditors, included lifting of liquidity of banks, deposit security and renewing of the judicial system. In the 300-seat parliament, 230 lawmakers voted in favor of the bill, with support for the ruling party coming from the pro-euro opposition parties.
The dollar reached an early high of $1.0921 against the Euro, but has since pulled back to over a 1-week low of $1.10.
Spain’s jobless rate declined to a near four-year low in the second quarter, the statistical office INE said Thursday. The unemployment rate dropped to 22.37 percent from 23.78 percent in the first quarter. This was the lowest rate since the third quarter of 2011, when it was 21.28 percent.
Economists had forecast the rate to fall to 22.5 percent. The jobless rate was 24.47 percent in the second quarter of last year.
The buck dropped to a 4-session low of $1.5670 against the pound sterling early Thursday, but has since climbed to a week and a half high of $1.5515.
U.K. retail sales declined unexpectedly in June, reflecting weak food and non-food store turnover, weighing marginally on the second quarter economic growth.
Retail sales including automotive fuel declined 0.2 percent in June from the prior month, reversing a 0.3 percent rise in May, data from the Office for National Statistics showed Thursday. Sales were expected to grow 0.4 percent. This was the first drop in three months.
The greenback rose to a high of Y124.185 against the Japanese Yen this morning, but has since retreated to around Y123.800.
Japan posted a merchandise trade deficit of 69.045 billion yen in June, the Ministry of Finance said on Thursday. That missed forecasts for a surplus of 45.8 billion following the downwardly revised 217.2 billion yen deficit in May.
The material has been provided by InstaForex Company – www.instaforex.com