(Updates prices)
The dollar fell on Thursday after data showed that U.S. jobless claims rose more than expected in the latest week, though the market was generally viewed as consolidating ahead of key inflation data and the Federal Reserve’s interest rate decision next week.
The number of Americans filing new claims for unemployment benefits surged to the highest level in more than 1-1/2 years last week with a 28,000-claim jump to a seasonally adjusted 261,000. Economists polled by Reuters had forecast 235,000 claims for the latest week.
“Claims (were) a bit higher than expected,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, but “we’re still in a consolidation mode ... right now we’re just trapped.”
The greenback has been bolstered by expectations that the Fed will hike rates in July, though it is widely expected to pause hikes at the conclusion of its June 13-14 meeting.
But worsening economic data may also limit how many further rate increases the U.S. central bank is able to achieve even if inflation pressures remain high.
“There is a small window of opportunity for the Fed to raise rates again, whether it's June or July, and the market now favors July ... the market doesn’t think there’s anything more to be done because the economy looks set to weaken,” said Chandler.
The euro EUR=EBS was last up 0.75% against the dollar at $1.0779. The single currency gained despite data showing that the euro zone economy was in a technical recession in the first three months of 2023. It got as high as $1.07870, the highest since May 24.
The greenback fell 0.87% to 138.94 yen JPY=EBS . The dollar index =USD , which measures the currency against six major peers, was down 0.67% to 103.33 and got as low as 103.29, the lowest since May 23.
The Canadian loonie was slightly stronger after the Bank of Canada surprised traders on Wednesday by raising interest rates to 4.75%, a 22-year high. The greenback was last down 0.09% at C$1.3358 CAD=D3 .
The Australian dollar AUD=D3 also gained after the Reserve Bank of Australia on Tuesday raised the cash rate to an 11-year high of 4.1%. It was up 0.91% at $0.6714.
The European Central Bank is expected to raise rates by 25 basis points (bps) when it meets next Thursday, to be followed by another 25-bps increase in July, taking rates to 3.75%.
The dollar tumbled 1.20% against the Swiss franc CHF=EBS to 0.899, the lowest since May 23. Swiss National Bank Chairman Thomas Jordan repeated his commitment to fight "stubborn" inflation on Thursday in his final public appearance before the central bank announces its next interest rate decision.
The greenback also dropped 1.45% against the Norwegian krone NOK=D3 to 10.89, the lowest since May 22.
======================================================== Currency bid prices at 3:00PM (1900 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 103.3300 104.0400 -0.67% -0.155% +104.0700 +103.2900 Euro/Dollar EUR=EBS $1.0779 $1.0699 +0.75% +0.60% +$1.0787 +$1.0698 Dollar/Yen JPY=EBS 138.9350 140.1600 -0.87% +5.97% +140.2250 +138.8150 Euro/Yen EURJPY= 149.75 149.93 -0.12% +6.74% +150.0400 +149.6000 Dollar/Swiss CHF=EBS 0.8992 0.9102 -1.20% -2.75% +0.9107 +0.8992 Sterling/Dollar GBP=D3 $1.2555 $1.2439 +0.94% +3.83% +$1.2558 +$1.2438 Dollar/Canadian CAD=D3 1.3358 1.3371 -0.09% -1.41% +1.3388 +1.3334 Aussie/Dollar AUD=D3 $0.6714 $0.6653 +0.91% -1.51% +$0.6718 +$0.6652 Euro/Swiss EURCHF= 0.9693 0.9736 -0.44% -2.04% +0.9761 +0.9692 Euro/Sterling EURGBP= 0.8583 0.8599 -0.19% -2.95% +0.8613 +0.8585 NZ NZD=D3 $0.6095 $0.6037 +0.95% -4.02% +$0.6099 +$0.6033 Dollar/DollarDollar/Norway NOK=D3 10.8940 11.0490 -1.45% +10.95% +11.0530 +10.8890 Euro/Norway EURNOK= 11.7444 11.7972 -0.45% +11.92% +11.8355 +11.7295 Dollar/Sweden SEK= 10.8007 10.8872 -0.14% +3.78% +10.9009 +10.7900 Euro/Sweden EURSEK= 11.6380 11.6545 -0.14% +4.38% +11.6860 +11.6281
