The US dollar rose against a basket of major currencies on Thursday after recent jobless claims data strengthened the case for the Federal Reserve holding off on interest rate hikes, but kept a high bar for year-end cuts.
The number of Americans filing new claims for jobless benefits rose last week to the highest level since late 2021, suggesting higher interest rates were starting to weigh on the labor market.
The labor market remains tight, with 1.6 job openings for every unemployed person in March, well above the 1.0-1.2 range consistent with a job market that isn’t generating much inflation.
On the other hand, US producer prices showed a modest increase last month, posting the smallest annual increase in producer inflation in more than two years, further evidence that inflationary pressures were easing.
The producer price index for final demand rose 0.2% last month. In the 12 months to April, the PPI increased by 2.3%. This was the smallest year-on-year increase since January 2021 and followed a 2.7% gain in March.
“For the dollar, I don’t think it meaningfully changes what’s already baked in,” said Joe Manimbo, senior market analyst at Convera in Washington. “I think there is a strong belief that the Fed will hold off on rate hikes. But at the same time, we are not seeing an airtight case for cutting rates until the end of the year.
The dollar index, which tracks the US currency against six major peers, was up 0.7% at 101.92.
Sterling, which earlier eased losses after the Bank of England raised interest rates for the 12th consecutive time, was down 0.8% at $1.2522.
The euro, which slipped to a three-week low after Chinese data showed more evidence of weakness in the COVID recovery, was last seen down 0.6% at $1.0904.
“The dollar’s recovery remains intact as China weakness and cautious rate guidance from the Bank of England dampened signs of the US labor market losing steam and inflation moderating,” Manimbo said.
Fed funds futures traders are pricing in pause ahead of an expected rate cut in September. The Fed’s target range is 5% to 5.25%.
,
Currency Quote Price at 9:22 AM (1322 GMT)
Details RIC Last US Close PCT Change YTD PCT High Bid Low Bid
last change
Session
Dollar Index 101.9200 101.4100 +0.51% -1.517% +101.9700 +101.3000
EUR/USD $1.0919 $1.0983 -0.58% +1.90% +$1.0998 +$1.0913
USD/JPY 134.0350 134.3900 -0.24% +2.26% +134.8350 +133.7350
EUR/JPY 146.35 147.57 -0.83% +4.32% +147.5900 +146.1900
Dollar/Swiss 0.8933 0.8898 +0.39% -3.39% +0.8950 +0.8889
Sterling/Dollar $1.2545 $1.2627 -0.65% +3.73% +$1.2640 +$1.2542
Dollar/Canadian 1.3456 1.3372 +0.64% -0.68% +1.3458 +1.3366
Aus/Dollar $0.6714 $0.6779 -0.97% -1.53% +$0.6796 +$0.6712
Euro/Swiss 0.9752 0.9771 -0.19% -1.45% +0.9782 +0.9747
Euro/Sterling 0.8702 0.8697 +0.06% -1.61% +0.8705 +0.8663
NZ $0.6327 $0.6368 -0.63% -0.35% +$0.6384 +$0.6326
dollar/dollar
Dollar/Norway 10.5980 10.5020 +0.84% +7.91% +10.6040 +10.4750
Euro/Norway 11.5757 11.5206 +0.48% +10.31% +11.5856 +11.4795
Dollar/Sweden 10.2859 10.2080 +0.12% -1.17% +10.2902 +10.2077
EUR/Sweden 11.2278 11.2141 +0.12% +0.70% +11.2482 +11.2027
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)