Investing.com – The dollar traded above break-even Thursday, buoyed by bullish initial jobless claims data, lifting expectations that the economy will rebound in the second-quarter but a widening of the trade balance limited upside momentum.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.09% to 97.04 by 12:51 EDT.
Investors mulled over a mixed bag of economic data, as initial jobless claims rose less than expected, offsetting a larger than expected rise in the trade deficit, which helped push the dollar into positive territory.
The U.S. Department of Labor reported that initial jobless claims rose by 1,000 to 234,000 in the week ended May 18.
Analysts had expected initial jobless claims to rise by 5,000 to 238,000 for the week ended May 18.
The goods trade gap – the difference in value between imported and exported goods – widened to $67.6 billion in April from $65.1 billion in March, the Census Bureau said in its advanced report.
The stronger labor market data comes a day after the release of the Federal Reserve’s minutes to its May meeting, pushed the dollar to fresh six-month lows, as investors parsed somewhat dovish comments from Fed members concerning future rate hikes.
The minutes revealed that some Fed members said that further signs would need to show that weakness in the first-quarter was temporary, prior to future rate hikes.
Traders' expectations of a June rate hike, however, remained intact – nearly 80% of traders expect the Federal Reserve to hike rates in June, according to investing.com's fed rate monitor tool.
EUR/USD traded flat at $1.1216 while EUR/GBP gained 0.05% to 0.8656.
GBP/USD fell to $1.2957, as investors look ahead to the general election, as the main UK political parties are set to resume national campaigning on Friday, after a three-day break imposed by the terrorist attack in Manchester.
USD/JPY rose by 0.22% to 111.75 while USD/CAD rose by 0.35% to $1.3455, as the oil-linked Canadian dollar, came under pressure after oil prices plummeted, following OPEC’s confirmation of a nine-month supply-cut agreement.