The dollar strengthened against its peers today following the release of data which revealed that US jobless claims increased less than forecast as predictions for an upcoming Fed rate increase further supported the greenback. The number of jobless claims filed for the week ending April 4 increased from 267,000 the previous week to 281,000 while experts forecast an increase to 285,000. Yesterday Fed officials remained divided over a rate increase taking place in June. Some viewed that a June increase would be required based on current economic data and others nearer the end of 2015 due to dollar strength and cheap oil prices.

The euro weakened against the dollar with the pair down over 1% trading at its 1.06 handle. The euro overlooked data which revealed that German industrial production increased 0.2% in February ahead of forecasts of 0.1% as energy and capital goods production expanded. Other figures revealed that German exports were up 1.5% in February as imports were also on the rise highlighting growth in the euro zone’s largest economy.

The pound weakened against the dollar with the pair down around 1% trading at its 1.47 handle. Data released by the UK Office for National Statistics revealed UK’s trade deficit increased from 9.17 billion pounds in January to 10.34 billion in February. Experts had forecast the deficit to decrease to 9 billion. The Bank of England announced that after 6 years it will keep interest rates unchanged at 0.50% and that its asset purchase program will remain at 375 billion pounds.

The yen weakened against the dollar with the pair rallying through its 120 handle. As the Bank of Japan could be introducing additional stimulus measures in the near term the pair could gain even further and break through its current tight range. Policy outlook continues to differ between the Fed and the BOJ, with the Fed possibly increasing rates and the BOJ introducing additional stimulus.

The Australian dollar strengthened while the New Zealand dollar held its ground against the greenback. The Canadian dollar weakened against the greenback following the release of data which revealed that Canadian building permits dropped 0.9% in February compounding forecasts for a 5.0% increase.

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