US Dollar Contains Losses on Better-than-expected Sales and Jobs Data

Edited by Vani Rao

Euro rises to a two-and-a-half year high against the US dollar

The US dollar slid 0.22% against the Euro on Thursday, March 13, 2014. The Euro/USD pair rose to its two-and-a-half yearly high amidst growing expectations that the European Central Bank (ECB) is unlikely to implement stimulus measures in the Eurozone. In the policy meeting last week, the ECB left interest rates unchanged at a record low 0.25%, raising optimism about the escalating growth in the European economy.

However, better-than-expected retail sales and jobless claims data provided resistance to the US dollar. According to reports by the US Department of Commerce, US retail sales rose 0.3% in February, outpacing market expectations of a 0.2% increase.

In addition, the US Department of Labor reported that the number of individuals filing for unemployment benefits fell by 9,000 to a three-month low of 315,000. The data came in ahead of expectations, as analysts had expected jobless claims to rise by 6,000 in the past week.

The Euro/USD closed Thursday’s trading session at 1.3868, after oscillating between 1.3849 and 1.3966, as indicated in the graph below. At the time of the last reporting, the Euro/USD was trading at 1.3853, down 0.10%.

G.C graph 1

Market experts will be keeping a close track of the US data on producer price inflation and the University of Michigan’s preliminary data on consumer sentiment, which will be announced on Friday, March 14.

GBP/USD

The US dollar remained low against the GBP on Thursday, March 13, 2014. However, the release of upbeat US economic reports lent support to the dollar, despite China’s disappointing industrial production data, which hurt the market sentiment on Thursday.

According to the US Department of Labor report, initial jobless benefits last week fell to 315,000, bettering analyst estimates who were expecting jobless claims to increase by 6,000. The better-than-expected jobless claims data enabled the US dollar to erase some of its losses against the GBP.

The GBP/USD fluctuated between 1.6614 and 1.6717, before finishing Thursday’s session at 1.6624, as shown in the graph below. At the time of the last reporting, the GBP/USD was trading at 1.6615, down 0.04%.

G.C graph 2

USD/JPY

The Japanese Yen edged lower against the US dollar on Thursday, following the release of minutes of meeting by Bank of Japan (BoJ). The Bank of Japan meeting went ahead as expected, as all the nine board members decided to continue with the bank’s large-scale financial asset purchases. In addition, the BoJ decided to double the lending of its low-interest loans to financial institutions in order to boost investment in growth-oriented sectors and projects.

Following the meeting, the USD/JPY finished Thursday’s trading session at 101.84, up 0.05%,as shown in the graph below. At the time of final reporting, the USD/JPY was trading at 101.56, down 0.27%.

G.C graph 3

Moving forward, minutes of BoJ’s monetary policy meeting and the US data on producer price inflation, are expected to trigger currency fluctuations between the USD/JPY pair.

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