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Forex - Dollar drops as U.S. braces for January jobs data

ForexJan 31, 2013 08:34PM GMT Add a Comment
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Investing.com - The dollar traded largely lower against most major currencies on Thursday after weaker-than-expected weekly jobless claims figures released earlier sparked jitters that the January jobs report to be released Friday may disappoint.

In U.S. trading on Thursday, EUR/USD was up 0.09% at 1.3578.

In the U.S. earlier, the Department of Labor reported that the number of individuals filing for initial jobless benefits last week rose by 38,000 to 368,000, compared to expectations for an increase of 20,000 to 350,000.

Personal incomes in the U.S., meanwhile, jumped 2.6% in December, the largest increase in eight years, though fears the January nonfarm payrolls report due for release on Friday may disappoint pushed the greenback down on Thursday.

The dollar continued to come under pressure after the Federal Reserve announced on Wednesday that it was sticking with loose monetary policies, including its USD85 billion monthly bond-purchasing program, known as quantitative easing, and leaving interest rates unchanged near zero.

Side effects to quantitative easing include rising stock prices and a weaker dollar.

The greenback did see support on U.S. Midwest manufacturing data.

The Chicago purchasing managers’ index rose to a seasonally adjusted 55.6 in January from a revised reading of 50.0 in December.

Analysts had expected the index to improve to 50.5 in January.

A reading above 50.0 indicates expansion, below indicates contraction.

Meanwhile in Europe, German retail sales fell 1.7% in December, their sharpest drop in more than three years, though solid labor-market data there offset those figures.

Also in Germany the number of unemployed people in Germany fell by 16,000 in January, doubling market calls for a decline of 8,000 bringing the unemployment rate down to 6.8% from 6.9% in December.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.35% at 1.5857.

The dollar rose against the yen, with USD/JPY trading up 0.35% at 91.41 and was down against the Swiss franc, with USD/CHF trading down 0.08% at 0.9102.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.37% at 0.9976, AUD/USD up 0.17% at 1.0433 and NZD/USD trading up 0.41% at 0.8394.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.09% at 79.22.

On Friday, the U.S. is to release the closely watched government report on nonfarm payrolls and the unemployment rate, while the Institute of Supply Management is to publish a report on manufacturing activity.

In addition, the University of Michigan is to release revised data on consumer sentiment.

Forex - Dollar drops as U.S. braces for January jobs data

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