The dollar weakened against its peers today despite favorable US jobless claims figures. The US Department of Labor reported an increase of 11,000 people claiming jobless benefits for the week ending January 31 while experts had forecast an increase of 23,000. Other data revealed that the US trade deficit increased from $39.75 billion in November to $46.56 billion in December while experts had forecast the deficit to decrease to $38 billion.
The euro strengthened against the dollar with the pair up over 1% from the lows of the day. The euro had been pressured by the European Central Bank announcing that it will not accept Greek bonds as loan collateral. Greece’s central bank now faces the task of creating additional liquidity for its lenders. The market is concerned that the Greek government’s debt crisis might lead to Greece no longer being a part of the euro zone if an agreement with its creditors cannot be reached. Euro zone data revealed that German factory orders increased by 4.2% in December, well beyond forecasts of a 1.5% increase following a 2.4% decline in November.
The pound strengthened against the dollar following data which revealed that UK house price inflation was up 2.0% in January following an increase of 1.1% in December while an increase of 0.1% was forecast. The Bank of England left its key interest rate unchanged and announced that there will be no amendments to its monetary policy as issues in Greece remained the focus of market outlook.
The yen weakened against the dollar slightly while the pair is still trading within a tight range. Japan’s economy is showing signs of recovery bouncing back from a recession with the help of cheap oil prices and a weakening yen.
The Australian and New Zealand dollars strengthened against the dollar. The Australian Bureau of Statistics released data which revealed that retail sales increased by 0.2% in December compounding forecasts for a 0.4% increase.
The Canadian dollar continued to strengthen trimming losses against the dollar. Statistics Canada released data which showed that Canada’s trade deficit increased from CAD 0.34 billion in November to CAD 0.65 billion in December while experts had forecast an increase to CAD 1 billion.
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