The dollar weakened against its peers today following the release of US jobless claims data which revealed a less than forecast decline and as outlook on China’s economy deteriorated supporting increased safe have demand. US jobless claims decreased this week to 277,000 from last week’s total of 287,000 while experts forecast a decrease to 275,000. The dollar was also pressured to the downside following the release of meeting minutes by the Federal Reserve which revealed that some members held the view that inflation could stay at low levels even while interest rates were increased. The US Dollar Index was down 0.44% trading at 98.84.
The euro strengthened against the dollar with the pair up over 1% trading at 1.0926 off its session high of 1.0934 after having come off its session low of 1.0770 reached earlier in the day. Data revealed that German factory orders climbed 1.5% in November surpassing forecasts for an increase of 0.1%. German retail sales increased by 0.2% in November compounding forecasts for an increase of 0.5%. Euro zone unemployment dropped to a more than 4 year low in November to 10.5% from 10.6% in October marking its 3rd consecutive monthly decline.
The pound weakened against the dollar with the pair down 0.25% trading at 1.4593 off its session low of 1.4532 after having come off its session high of 1.4639 reached earlier in the day. The pound dropped to 5.5 year lows against the dollar as market unrest in China boosted safe haven demand. The pound was also pressured lower amid doubt surrounding a UK referendum on European Union membership.
The yen strengthened against the dollar with the pair down over 0.5% trading at 117.63 off its session low of 117.32 after having come off its session high of 118.75 reached earlier in the day. The yen remained supported by safe haven demand after the People’s Bank of China reduced its official yuan midpoint rate from the rate set yesterday. The move lower was the rate’s largest drop since August of last year when a widespread selloff in global markets followed a near 2% devaluation of the yuan.
The Australian and New Zealand dollars weakened against the greenback. The Aussie declined 0.71% against the dollar with the pair trading at 0.7021 off its session low of 0.6980 after having come off its session high of 0.7085 reached earlier in the day. The kiwi dollar dropped 0.12% against the greenback with the pair trading at 0.6632 off its session low of 0.6590 after having come off its session high of 0.6666 reached earlier in the day. Building approvals for Australia dropped by 12.7% in November compounding forecasts for a decline of 3.0%. Australia’s trade deficit shrank from AUD 3.247 billion in October to AUD 2.906 billion in November.
The Canadian dollar strengthened against the greenback with the pair down 0.15% trading at 1.4062 off its session low of 1.4049 after having come off its session high and 12.5 year peak of 1.4169 reached earlier in the day. Bank of Canada Governor Stephen Poloz remarked that the central bank is prepared to maintain the current weakness of its currency.
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