US dollar rises on jobless claims, non-manufacturing growth
The US dollar soared more than half a percent against a basket of its major peers as fewer Americans applied for unemployment benefits last week. According to the Labor Department, 323,000 Americans applied for unemployment benefits in the week ending August 30, beating expectations for 330,000. This represents a drop of 9,000 over the previous week. A separate report from the ADP Research Institute showed American companies added 176,000 payrolls in August. On Friday the Labor Department will release official nonfarm payrolls for the month of August.
The US dollar index reached 82.62 in the North American session, having advanced almost 1.5 percent against its peers over the previous five days. The greenback soared another 0.61 percent against the euro, bringing EURUSD crashing toward the 1.31 support. The pair closed the session around 1.3120.
In other trading, the US dollar extended its gains on the yen, clipping the psychological 100 level for the first time since July following comments from Bank of Japan Governor Haruhiko Kuroda. The head of the BoJ assured the markets the central bank would introduce more aggressive monetary policy to offset any potential downside risk associated with the proposed tax hike. Japanese policymakers have proposed to increase the sales tax from 5 percent to 8 percent.
The Canadian dollar managed to hold firm against its southern counterpart, relinquishing less than 0.1 percent of its opening position to bring USDCAD to 1.0505. The Canadian calendar was empty Thursday, but will close out the week with important data on employment and PMI. The Canadian economy is expected to have added 20,000 jobs in August.
In a separate report from the Institute of Supply Management US non-manufacturing activity grew at a faster pace than expected in August. The August reading of 58.6 is the highest the index has ever produced since its inception in 2008. The index’s employment indicator increased 3.8 percentage points, signaling the 13th consecutive month of employment growth in non-manufacturing industries.
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