The dollar is extending its recent losses Thursday. However, the decrease is rather modest when you consider today’s weaker than expected economic reports. Continuing the recent trend of disappointing data, weekly jobless claims unexpectedly climbed this morning and readings on both housing starts and building permits fell short of estimates.
After reporting a notable rebound 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 unexpectedly saw another increase in the week ended April 11th.
The report said initial jobless claims climbed to 294,000, an increase of 12,000 from the previous week’s revised level of 282,000. The increase came as a surprise to economists, who had expected jobless claims to edge down to 280,000 from the 281,000 originally reported for the previous week.
While the Commerce Department released a report on Thursday showing a rebound in new U.S. residential construction in the month of March, housing starts still came in well below economist estimates for the month.
The report said housing starts rose 2.0 percent to an annual rate of 926,000 in March after tumbling 15.3 percent to a rate of 908,000 in February. Economists had been expecting housing starts to jump to a rate of 1.04 million.
The Commerce Department also said building permits, an indicator of future housing demand, fell 5.7 percent to an annual rate of 1.039 million in March after climbing 4 percent to a rate of 1.102 million in February. Economists had been expecting building permits to show a much more modest decrease to a rate of 1.085 million.
Growth in Philadelphia-area manufacturing activity has seen a modest acceleration in the month of April, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday. The Philly Fed said its diffusion index of current activity rose to 7.5 in April from 5.0 in March, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to inch up to 6.0.
The collapse in oil prices has cost jobs in certain regions of the U.S., according to the latest Beige Book report from the Federal Reserve yesterday afternoon. Layoffs were reported throughout the Fed’s Midwest regions, including Minneapolis, which contains the key North Dakota shale fields, and Dallas, where weakness in the Texas oil sector was apparent.
Although the Fed said the broader U.S. economy expanded at a moderate or modest pace in the period including most of February through March, the manufacturing sector was hurt by the strong dollar and a harsh winter.
Standard & Poor’s Ratings Services cut its credit ratings on Greece deeper into junk territory, saying it expects the country’s debt and other financial commitments to be “unsustainable” without deep economic reform.
Professional forecasters have further lowered the inflation forecast for this year, while raising the growth predictions, results of a quarterly survey by the European Central Bank revealed Thursday.
The Survey of Professional Forecasters for the second quarter showed that the inflation projection for this year was cut to 0.1 percent from 0.3 percent seen in the January round.
The dollar has fallen to a 1-week low of $1.0780 against the Euro Thursday afternoon, from a 1-month high of around $1.0530 at the start of the trading week.
The buck has also dropped to over a 1-week low of $1.4945 against the pound sterling Thursday, from nearly a 5-year high of around $1.46 on Monday.
The leading economic index in the UK, which measures the future economic activity, increased for the second straight month in February, the results of a survey by the Conference Board showed Wednesday. The Conference Board leading economic index climbed 0.6 percent in February, following a 0.2 percent rise in the previous month. The latest figure marked its largest monthly increase since June 2014.
The greenback has been trading in a range against the Japanese Yen since about this time yesterday and is currently trading near the lower end of that range, at Y118.975. The upper end of the range is around Y119.400.
The material has been provided by InstaForex Company – www.instaforex.com