The dollar weakened against its peers today following a series of mixed US data which increased doubt surrounding the state of the economy and when the Federal Reserve will increase its key interest rate. The number of jobless claims filed for the week ending April 11 rose to 294,000 from 282,000 for the previous week. The number of building permits granted in March dropped by 5.7% in March from 1.102 million units in February to 1.039 million while experts had forecast a 2.0% decrease. US housing starts increased by 2.0% in March from 908,000 units in February to 926,000 compounding forecasts for a 15.9% increase. The Federal Reserve of Philadelphia’s manufacturing index reached its highest level in 4 months to 7.5 in April from 5.0 in March while experts had forecast a reading of 6.0.

The euro strengthened against the dollar although outlook remained weak following an announcement from the European Central Bank which indicated that the full scope of its trillion euro stimulus program will be introduced. ECB President disregarded talk that economic indicators of late could result in its asset program being reduced and that it will be difficult to find sufficient euro zone bonds to purchase.

The pound strengthened against the dollar as outlook on the greenback deteriorated after having weakened earlier in the session. The market had overlooked data released on Tuesday which revealed that the annual rate of UK consumer inflation remained at an historic low of zero in March. Even though the Bank of England has set a target of 2% for inflation stimulus will most probably not be introduced as a result of the inflationary draw down of late.

The yen weakened against the dollar with the pair still trading in its even tighter range today of less than a big figure. Traders still await a breakout from its too narrow range for price action to signal better opportunities. The pair could break through on the possibility the Bank of Japan introduces additional stimulus measures in the near term. 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, New Zealand and Canadian dollars were widely stronger against the greenback. The Aussie dollar was underpinned by Australian employment data which revealed that the number of those with jobs increased by 37,700 in March which was well beyond forecasts for an increase of 15,000. Data also indicated that Australia’s unemployment rate dropped from 6.2% in February to 6.1% in March while experts had forecast the rate to stay unchanged from its previous estimate of 6.3%. The loonie strengthened to a 3 month high as discouraging data out of the US put pressure on the greenback.

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