The dollar is gaining ground against its major European competitors Thursday and is bouncing back from early weakness against the Japanese Yen. Geopolitical concerns are partly responsible for the move, as well as the larger than expected decrease in U.S. weekly jobless claims.
After reporting a modest uptick 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 March 21st.
The report said initial jobless claims fell to 282,000, a decrease of 9,000 from the previous week’s unrevised level of 291,000. Economists had expected jobless claims to edge down to 290,000.
Saudi Arabia and its allies have launched air strikes against the Houthi rebels in Yemen, who recently overthrew the nation’s president. Saudi ambassador in the US, Adel al-Jubeir said the military action was aimed to defend the “legitimate government” of Hadi, who has taken refuge in the southern port city of Aden.
The news has led to worries about a broader sectarian conflict in the Middle East, as the Saudis consider the Houthi rebels as proxies for Iran.
While speaking to Italian lower house, ECB President Mario Draghi noted that the ECB bond buying program is having effect on the euro area economy.
Monetary policy coupled with weak oil prices and reforms are supporting the economic activity, Draghi noted, adding that structural reforms are also needed for economic growth.
Even though short term outlook for the region appears more favourable, recovery remains weak, Draghi indicated.
The dollar dropped to a 3-week low of $1.1052 against the Euro early Thursday, but has since risen to a 3-day high of $1.0865.
German consumer confidence is set to improve further to its highest level in more than 13 years in April, as weak euro and low inflation function as mini stimulus to the economy, survey data from the market research group GfK showed Thursday.
The forward-looking consumer sentiment index rose to 10 in April from 9.7 points in March. This was the highest score since October 2001. The index was expected to rise marginally to 9.8.
The French economy grew marginally as initially estimated in the fourth quarter, final data from the statistical office Insee showed Thursday. Gross domestic product rose 0.1 percent sequentially following third quarter’s 0.3 percent increase. The rate came in line with the estimate published on February 13.
French unemployment increased in February following a decline in the prior month, the labor ministry reported late Wednesday. The number of people out of work rose by 12,800 from January to 3.49 million. It increased by 0.4 percent on a monthly basis and 4.6 percent from last year.
The leading Index for France, which measures the future economic activity, increased in January, after remaining unchanged in the previous month, survey figures from Conference Board showed Wednesday. The Conference Board leading economic index rose 0.2 percent in January, after staying flat in December. In November, the index had risen 0.1 percent.
The buck also slipped to a 1-week low of $1.4994 against the pound sterling early Thursday, but has since broken out to a 4-day high of $1.4825.
British retail sales continued to expand in February at a faster-than-expected pace, suggesting strong support from domestic spending to economic growth in the first quarter. Retail sales increased at a faster pace of 0.7 percent in February from January, when it gained 0.1 percent, data from the Office for National Statistics revealed Thursday.
The monthly growth exceeded a 0.4 percent rise forecast by economists and marked the fifth straight month of growth.
U.K. retail sales picked up in March after growth nearly halted in February, Distributive Trades survey from the Confederation of British Industry showed Thursday. The retail sales balance rose to 18 percent from 1 percent in February. Nonetheless, it was below expectations of 27 percent.
The greenback sank to over a 1-month low of Y118.329 against the Japanese Yen this morning, but has bounced back to around Y119.360 this afternoon.
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