Investing.com - The dollar traded mixed to higher against most major currencies on Thursday despite a lackluster report on weekly U.S. jobless claims, as investors viewed the report as unlikely to sway the Federal Reserve from moving towards tighter monetary policy.
In U.S. trading on Thursday, EUR/USD was up 0.02% at 1.2920.
The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Sept. 6 increased by 11,000 to a 10-week high of 315,000 from the previous week’s revised total of 304,000.
Analysts had expected jobless claims to fall by 4,000 to 300,000 last week, and the figure gave investors room to sell the greenback for profits.
The dollar still remained strong against the euro and most other currencies, as the labor market has shown consistent improvement this year.
Furthermore, the labor market often appears weaker than it really is in August due to seasonal factors, while factory, service-sector, gross domestic product and other data all point to a U.S. recovery that is gaining steam, with hiccups here and there.
The Federal Reserve will conclude a two-day policy meeting next week, and markets expect the monetary authority to cut its monthly bond-buying program by $10 billion to $15 billion, with some hoping for language hinting at when interest rates may rise.
A Federal Reserve Bank of San Francisco report published on Monday suggested rate hikes may come sooner than markets may be expecting.
Geopolitical issues dampened the greenback somewhat.
U.S. President Barack Obama said earlier Washington will join the European Union and slap fresh sanctions on Russia, accusing it of meddling in neighbor Ukraine's internal conflict.
Sanctions will target Russia’s financial, energy, and defense sectors and will take effect on Friday, when further details will be released.
The move rekindled fears that the conflict may drag on U.S. recovery.
The dollar was up against the yen, with USD/JPY up 0.23% at 107.10, and down against the Swiss franc, with USD/CHF down 0.08% at 0.9360.
The dollar rose to six-year peaks against the yen earlier Thursday after BoJ Governor Haruhiko Kuroda said the bank would be prepared to immediately loosen monetary policy or implement other measures if its 2% inflation target becomes difficult to meet.
Earlier this week official data showed that Japan’s second quarter economic contraction was larger than initially estimated, and another report showed that the country’s current account surplus fell short of expectations in July.
The lackluster data indicated the economy is struggling to gain momentum and fuelled expectations for more stimulus from the Japanese central bank.
The greenback was down against the pound, with GBP/USD up 0.06% at 1.6221.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 1.00% at 1.1045, AUD/USD down 0.72% at 0.9092 and NZD/USD down 0.24% at 0.8175.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.09% at 84.47.
On Friday, more heavy-hitting data will publish.
The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
The U.S. is also to release what will be closely watched preliminary data on consumer sentiment.