Forex - Dollar falls against yen in early Asia, Aussie down

Investing.com - The Japanese yen gained sharply against the dollar in early Asia on Friday and the Australian dollar weakened in a light data day.

USD/JPY traded at 108.03, down 0.22%, while AUD/USD changed hands at 0.8730, down 0.34%.

Overnight, the dollar traded largely higher against most major currencies after upbeat U.S. weekly jobless claims numbers and third-quarter earnings bolstered demand for the greenback, though solid European data gave the euro some support.

The Department of Labor reported earlier that the number of individuals in the U.S. filing for initial jobless benefits in the week ending Oct. 18 increased by 17,000 to 283,000, broadly in line with forecasts.

The four-week average fell to 281,000, the lowest since May 2000, while continuing claims, which includes those receiving benefits for at least a second month in a row, also hit a 14-year low, of 2.35 million, which bolstered the U.S. currency.

Better-than-expected earnings from General Motors as well as Caterpillar, the latter of which hiked its profit outlook, boosted dollar demand by reminding investors that despite hiccups here and there, the U.S. economy continues to recover and will likely warrant rate hikes next year.

Still, the euro saw some support on upbeat European data.

Research group Markit Economics reported earlier that its preliminary manufacturing purchasing managers’ index for the euro area ticked up to 50.7 this month from a final reading of 50.3 in September. Analysts had expected the index to slide to 49.9.

The service-sector PMI held steady at 52.4, slightly above expectations of 52.0.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.08% at 85.89.

On Friday, the U.S. is to round up the week with a report on new home sales.