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US Dollar Rebounds in Afternoon Session

H.S. Borji
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US Dollar Rebounds in Afternoon Session

The US dollar rebounded Thursday, after trading to the downside in the early North American session following a sharper than forecast rise in weekly jobless claims.

The US dollar index, a weighted average of the greenback’s performance against six major rivals, was at 81.59, unchanged from the previous close. The index, which has tread water this week, rebounded from an intraday low of 81.40.

The USDJPY consolidated at 102.44, bouncing from an intraday low of 102.32. Initial support is likely found at 102.24 and resistance at 102.58. The pair is pacing for a weekly gain of 0.4 percent.

The EURUSD consolidated at 1.3367, easing off an intraday high of 1.3406. The pair faces initial support at 1.3333 and resistance at 1.3407.

The GBPUSD was little changed at 1.6689, after tumbling 0.8 percent in the previous session. The pair faces initial support at 1.6633 and resistance at 1.6794.

The USDCAD consolidated at 1.0902, declining 0.11 percent. Initial support is likely found at 1.0899 and resistance at 1.0937.

The dollar dipped in the morning session after weekly jobless claims increased 21,000 to 310,000 in the week ended August 2, the Labor Department reported today. Economists forecast a slight increase to 295,000.

The uptick pushed the four-week moving average to 295,750, up from the previous week’s eight-and-a-half year low of 293,750.

Continuing jobless claims increased 25,000 to 2.544 million, official data showed.

Soft jobless claims data are unlikely to shake demand for the US dollar over the long term. Earlier this month the Labor Department said US employers added 209,000 nonfarm payrolls in July, following an upwardly revised gain of 298,000 the previous month. July marked the sixth consecutive month job growth was above the 200,000 mark.

The United States has a heavy release schedule on Friday.

The Labor Department will release producer inflation figures. Producer prices are forecast to grow at an annual rate of 1.8 percent in July.

The Board of Governors of the Federal Reserve System will release industrial production figures. Production at US industries is forecast to increase 0.2 percent in July.

The Treasury Department will release data on June Treasury International Capital flows, which measure inflows and outflows of financial resources in the US.

Finally, Reuters and the University of Michigan will joint-release this month’s consumer sentiment index. US consumer confidence is forecast to have increased slightly this month.

Meanwhile, stocks received a boost on Thursday after the Eurozone economy stagnated in the second quarter, boosting bets the European Central Bank would roll out additional stimulus measures.

Germany, which represents nearly one-third of Eurozone output, contracted 0.2 percent in the three months through June after growing at a 0.8 percent pace the previous quarter.

Stimulus bets helped boost European stock markets. Frankfurt’s DAX 30 index advanced 0.29 percent to 9,255.10. Meanwhile, London’s FTSE 100 index advanced 0.43 percent to 6,685.26.

North America’s benchmark indices rose Thursday. The Dow Jones Industrial Average advanced 0.3 percent to 16,702.53. The S&P 500 rose 0.32 percent to 1,952.99. The Nasdaq Composite edged up 0.28 percent to 4,446.67.

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