Remember that disappointing US Nonfarm Payrolls data that shook up hopes for a rate hike and tanked the dollar? Less than a week later, weekly jobless claims data, usually not so important, became highly anticipated as markets waited for the release this morning. The report, which came at 8:30 a.m. ET, showed that last week’s jobless claims unexpectedly fell to 264K compared to the estimated 270K. An increase would have confirmed fears of a slowdown in US economy, brought on by dismal payroll data. The dollar has strengthened on the back of the positive figures.
Meanwhile, the Japanese yen and New Zealand dollar are in the news: the yen has advanced to a one-month high, while the kiwi dollar has surged to the highest level in a year, gaining the most among major currencies after its central bank’s inaction.
The Asian market has received a blow from poor Chinese inflation figures overnight, which have revived concerns over a slowdown in the Chinese economy. Stocks fell in Asia, leading to a sharp decline in European stocks as well. Europe also saw the release of German Trade Balance figures for April, which showed a record surplus, flat exports and a contraction in imports. The export data shows a slowdown when compared to growth posted in February and March. European Central Bank President Mario Draghi said this morning that years of weak growth have eroded Eurozone productivity. Speaking at the Brussels Economic Forum, he concluded that monetary policy alone won’t be enough to fix the ailing economy. The grim mood and global risk-off attitude seem to be sending investors to the traditional security of the dollar, further helping the greenback.
EURUSD: German yields weigh on sentiment around euro, dragging it down.
GBPUSD: Pound looks ahead to weak house price figures and continuing economic uncertainty.
AUDUSD: Aussie dollar falls after release of poor Chinese inflation figures, its top export destination.
USDCAD: Greenback climbs against the loonie after positive jobless claims figures.