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Dollar Turns In Lackluster Performance Against Major Rivals

Dollar Turns In Lackluster Performance Against Major Rivals

The U.S. dollar turned in a lackluster performance against its peers on Thursday as traders reacted to a slew of economic data from the U.S. and Europe, and reacted to comments from BoE policymaker about a likely hie in UK interest rate next year.

Data released by the Labor Department showed initial jobless claims in the U.S. slid to 406,000 in the week ended May 22nd, a decrease of 38,000 from the previous week’s unrevised level of 444,000. Economists had expected jobless claims to dip to 425,000.

Jobless claims decreased for the fourth consecutive week, once again falling to their lowest level since hitting 256,000 in the week ended March 14, 2020.

A report from the Commerce Department showed an unexpected pullback in durable goods orders in April, although the decrease was largely due to a steep drop in orders for transportation equipment.

The report showed durable goods orders tumbled by 1.3% in April after jumping by an upwardly revised 1.3% in March. Economists had expected durable goods orders to climb by 0.7% in April.

The Commerce Department also released a report showing the pace of U.S. economic growth in the first quarter was unrevised from the advance estimate.

The report showed real gross domestic product spiked by 6.4% in the first quarter, unchanged from the estimate provided last month. Economists had expected a modest upward revision in the pace of GDP growth to 6.5%.

The dollar index, which briefly emerged into positive territory after data showed another drop in weekly U.S. jobless claims, retreated again in late morning trades. Despite a subsequent recovery, it faltered again as the session progressed.

The dollar index was last seen hovering around 90.00, down marginally from the previous close. The index touched a low of 89.89 before the release of jobless claims data.

Against the Euro, the dollar was flat at $1.2197 a little while ago. Earlier, after sliding to $1.2217 a unit of Euro, the dollar recovered to $1.2175 before sliding again.

The Pound Sterling gained against other major currencies after a Bank of England policymaker hinted at a rate hike next year, though it could happen earlier if the economy rebounds quickly.

Speaking at the University of Bath, Gertjan Vlieghe said “the first rise in bank rate is likely to become appropriate only well into next year, with some modest further tightening thereafter”.

The dollar weakened to $1.4219 a unit of Sterling, before recovering to $1.4201, still down by about 0.6%.

The Yen weakened to 109.83 a dollar, giving up more than 0.6%.

Against the Aussie, the dollar was flat with the AUD-USD at 0.7743.

The Swiss franc strengthened against the dollar, firming to 0.8968, from Wednesday’s close of 0.8982 a dollar. Data from the Federal Customs Administration showed Switzerland’s exports increased by a real 0.1% month-on-month in April, after a 5.1% growth in March. Imports rose 2.2% monthly in April, after a 3.7% increase in the previous month.

The Loonie was stronger by nearly 0.5% at C$1.2066 a dollar, gaining from C$1.2123.

The material has been provided by InstaForex Company – www.instaforex.com