U.S. dollar slips from 1-year high on weak data, consolidation

© Reuters. FILE PHOTO: U.S. dollar banknotes are seen in this photo illustration taken February 12, 2018. REUTERS/Jose Luis Gonzalez/Illustration/File Photo

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -The dollar edged lower from a one-year high on Thursday in choppy trading, pressured a little bit by a rise in U.S. weekly jobless claims, with investors also consolidating gains after a steep rise the last few sessions.

The greenback overall has been supported by the spike in U.S. Treasury yields amid expectations the Federal Reserve will taper its monetary stimulus beginning in November even as global growth slows.

Thursday's economic data, though, dented some of the dollar's strength.

U.S. initial jobless claims rose for a third straight week to 362,000 for the period ending Sept. 25, data showed. Economists polled by Reuters had forecast 335,000 jobless applications for the latest week.

That said, another report confirmed that U.S. economic growth accelerated in the second quarter, at a 6.7% clip, thanks to pandemic relief money from the government, which boosted consumer spending.

"Even if the U.S. dollar falls back a bit further in the near term, we expect it to resume its recent rally in due course," Joseph Marlow, assistant economist at Capital Economics, wrote in a research note.

"Although long-term yields have risen in most major economies, U.S. bond yields have increased by more than most and, importantly, been driven in large part by higher real yields, reflecting expectations of tighter monetary policy."

The dollar index, which measures the currency against a basket of six rivals, hit 94.504, its highest since Sept. 28 last year. It was last down 0.2% at 94.199.

For the month, the dollar ended up 1.7%, its second straight monthly gain. For the third quarter, the dollar rose 2%.

Marc Chandler, chief market strategist at Bannockburn Forex, in a research note wrote that "a consolidative tone is evident" after the dollar's surge on Wednesday.

The dollar's recent gains came despite a political standoff in Washington over the U.S. debt ceiling that threatens to shut down much of the government.

Yields on the benchmark 10-year Treasury note stood at 1.524%, holding near a three-month high reached Tuesday of 1.567%.

The dollar hit 112.07 yen, the highest since February 2020. It was last down 0.5% at 111.36 yen, its biggest daily percentage fall since mid-August.

For the month of September, however, the dollar posted a 1.2% gain versus the yen, and a more modest 0.4% rise for the third quarter.

The euro was down 0.1% at $1.1586, after earlier hitting $1.1563,its lowest since July 2020.

Europe's single currency was down 1.9% against the dollar for the month and 2.2% weaker for the third quarter.

The risk-sensitive Australian dollar firmed 0.8% to US$0.7232, after plummeting 0.9% overnight, as iron ore prices rallied ahead of the Golden Week holiday in Australia's top trading destination China.

A slight improvement in overall risk sentiment after days of gloom was seen in the cryptocurrency markets, as bitcoin rose 5.7%% to $43,929 and ether bounced 6.2% to $3,028. Both coins are down between 20% and 27% from their September peaks.

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Currency bid prices at 3:20PM (1920 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 94.1870 94.3440 -0.15% 4.674% +94.5040 +94.1090

Euro/Dollar $1.1588 $1.1598 -0.09% -5.16% +$1.1610 +$1.1563

Dollar/Yen 111.3700 111.9750 -0.54% +7.79% +112.0750 +111.3200

Euro/Yen 129.04 129.82 -0.60% +1.67% +129.9500 +128.8100

Dollar/Swiss 0.9323 0.9346 -0.22% +5.41% +0.9368 +0.9322

Sterling/Dollar $1.3482 $1.3427 +0.42% -1.31% +$1.3517 +$1.3417

Dollar/Canadian 1.2656 1.2753 -0.78% -0.64% +1.2763 +1.2631

Aussie/Dollar $0.7235 $0.7174 +0.86% -5.94% +$0.7257 +$0.7176

Euro/Swiss 1.0803 1.0839 -0.33% -0.04% +1.0847 +1.0802

Euro/Sterling 0.8594 0.8636 -0.49% -3.84% +0.8643 +0.8578

NZ $0.6912 $0.6866 +0.71% -3.72% +$0.6921 +$0.6860

Dollar/Dollar

Dollar/Norway 8.7315 8.7860 -0.55% +1.76% +8.8295 +8.7140

Euro/Norway 10.1196 10.1740 -0.53% -3.32% +10.2315 +10.1054

Dollar/Sweden 8.7513 8.8067 -0.72% +6.77% +8.8118 +8.7383

Euro/Sweden 10.1406 10.2141 -0.72% +0.64% +10.2167 +10.1320