Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Dollar gains as jobless claims affirm resilient US labor market

Published 02/06/2024, 08:29 PM
Updated 02/08/2024, 03:02 PM
© Reuters. FILE PHOTO: U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

By Herbert Lash and Samuel Indyk

NEW YORK/LONDON (Reuters) -The dollar rose on Thursday after data on unemployment benefits again pointed to a resilient U.S. labor market, reinforcing the Federal Reserve's message that interest rates are unlikely to be cut in the near term.

The number of Americans filing new claims for unemployment benefits fell more than expected last week, the latest sign of labor market strength despite a recent spike in layoffs.

Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 218,000 for the week ended Feb. 3, the Labor Department said, less than the 220,000 forecast by economists polled by Reuters.

The initial claims data still points to a robust U.S. labor market that has kept the dollar strong, said Thierry Wizman, global FX and interest rates strategist at Macquarie in New York.

"The problem here is that we continue to get positive surprises in the U.S. and we're not getting enough positive surprises in the rest of the world, and certainly not in China," he said.

"If the dollar is going to weaken, we're going to need to see some attenuation of the robustness in the U.S. data and some improvement in the data in Europe and China," he said. "When's that going to happen? Very, very hard to say."

The next major scheduled U.S. data release is January's Consumer Price Index (CPI) reading of inflation on Feb. 13.

Expectations for U.S. central bank rate cuts by year end have been slashed to 115 basis points (bps) from 140 bps just before the release of last Friday's blowout jobs report, trading in Fed funds futures show.

The likelihood of a rate cut in March slipped one-half percentage point from Wednesday to 18.5%, but was about half expectations of 36.5% a week ago, according to CME Group's (NASDAQ:CME) FedWatch Tool.

The dollar index was last up 0.14% at 104.16, after hitting 104.43 following the initial claims report. The euro rebounded from a low of 1.074, gaining 0.02% to $1.0773.

Higher Treasury yields also have bolstered the dollar, particularly against lower-yielding currencies, such as the yen.

The two-year Treasury yield, which reflects interest rate expectations, rose 3.4 basis points to 4.456% and the 10-year yield was up 7 basis points at 4.168%.

The yen was down about 0.82% versus the greenback at 149.380. It slipped to 149.46 after the initial claims data, its weakest level since Nov. 27.

Bank of Japan Deputy Governor Shinichi Uchida said overnight that the central bank was unlikely to raise interest rates aggressively, even after exiting negative interest rates.

Sterling was down 0.11% at $1.2613.

The yuan held steady despite data that showed China's consumer prices fell at their steepest pace in more than 14 years in January.

CPI fell 0.8% from a year earlier, but rose 0.3% month-on-month. Economists polled by Reuters had forecast a 0.5% fall year-on-year and a 0.4% gain month-on-month.

© Reuters. FILE PHOTO: U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

The offshore Chinese yuan rose 0.05% to $7.2159 per dollar, while the onshore yuan rose 0.03% to $7.1965.

Bitcoin rose 2.73% to $45,396.44, the first time it has risen above $45,000 since Jan. 12.

Latest comments

im hoping everything is going to go good
Yep ,with another revised numbers 🤣🤣🤣🤣🤣🤣🤣
I am waiting 153 to get in JPY 👍
you really think JPY is gonna reach 153?
Wow I invested $5,500 and I got $18,700 in return, thanks 🙏🙏 you so much sir you've change my life. you made me an independent woman and my family, once again thank you very much for the good things you've done into my life. I promise you i will invite more and more and more of my friend to follow you up for Thier guidelines on your platform..... Kindly message him on wtsap(+)31612574318) and testify his good work...... 1010100001100110011010011010001011010101010100110101010101010101010101010101010101010101010011010101010101001101010101010101010101010101010101001100110101010101010101010101010101010101010101010101010101010101010101010101010101010101010101010101010
ya sure you did Gracie, are you interested in buying ing a bridge....this dangerous spam stay away...
wow, amazing profits! I'll call him today and start with 100K
For more than a year now Pleterski's investors have been trying to track down more than $40 million they gave him to invest in cryptocurrency and foreign exchange. A Toronto-based bankruptcy proceeding that's being heard in Ontario Superior Court has recovered about $3 million for roughly 160 investors.
i want the money
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.