The dollar cut its advances against its peers today coming off of session highs however the greenback remained supported near its 7 month high following remarks from Federal Reserve Chair Janet Yellen which did not include indications on monetary policy to be implemented and the central bank’s outlook for the US economy. The US Department of Labor reported US jobless claims filed for last week was the same as the previous week’s total of 276,000 while experts had forecast a decline of 6,000 to 270,000. Dollar demand remained intact following last Friday’s solid US nonfarm payrolls data which opened the door for a Fed rate hike expected in December. The US Dollar Index traded steadily at 99.00 near its 7 month high of 99.60 reached on Tuesday.
The euro inched up over the dollar up 0.13% trading at 1.0758 after having weakened against the greenback on the back of remarks from European Central Bank President Mario Draghi which highlighted the central bank’s commitment to evaluate its current level of monetary stimulus. Draghi indicated that a weakening of the components driving inflation could prolong the central bank’s efforts to normalize it.
The pound held its ground against the dollar with the pair trading steadily at 1.5204. Chief Economist Haldane of the Bank of England stated that a rate increase by the central bank was not necessary in the near term as a rise in wages has washed out and outlook on the global economy is up in the air. Haldane highlighted that the BOE’s key interest rate could be lowered to below zero rather than increased as the UK economy is losing momentum.
The yen held its ground against the dollar with the pair trading steadily at 122.97 close to its 3 month high of 123.61 reached last week. The yen continued on with its uneventful week trading in its usual tight range against the dollar. Japanese 30 year bonds posted a 1.39% yield. With inflation approaching the Bank of Japan’s target calls for additional stimulus by the central bank are becoming less warranted.
The Australian dollar strengthened while the New Zealand and Canadian dollars weakened against the greenback. The Aussie gained 0.57% against the dollar with the pair trading at 0.7102. The Aussie was widely supported on the back of data released by the Australian Bureau of Statistics which revealed that the number of employed individuals rose by 58,600 in October well beyond forecasts for an increase of 15,000. The total had dropped by 800 in September while prior estimates suggested a decline of 5,100. Australia’s unemployment rate inched down from 6.2% in September to 5.9% in October while experts had forecast the unemployment rate to remain at 6.2%.
The kiwi dolar declined 0.64% against the greenback with the pair trading at 0.64% to 0.6515. The loonie dropped 0.38% against the dollar with the pair trading at 1.3317 close to its 1 month high of 1.3316 reached last week. Weakening oil prices maintained its heavy load on the loonie as the currency is closely tied to commodities markets.
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