U.S. Dollar Accelerates after Jobless Claims Fall to Eight-Year Low

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U.S. Dollar Accelerates after Jobless Claims Fall to Eight-Year LowThe dollar rose to its strongest level in over a month versus its counterparts after jobless claims fell to the lowest level in eight years, indicating that the U.S. jobs market is improving.

The euro remained slightly unchanged at $1.3467 after earlier declining to $1.3438, its weakest level since November 21. The euro advanced 0.4 percent to trade at 137.12 yen, while the dollar appreciated 0.3 percent to 101.82 yen and hit 101.86, its strongest level since July 9. The euro got its boost from data that showed that manufacturing activity unexpectedly surged in July.

“Recent U.S. data has been consistent with the view that the U.S. is recovering nicely,” Mark McCormick, a New York-based macro strategist at Credit Agricole SA, told Bloomberg. “The macro story is still supportive of a dollar rally in the second half. We look for the dollar to gather momentum once we hit September, so not sure if this mini-rally has legs.”

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The euro rose after Markit Economics reported that its euro area manufacturing index grew to 51.8 in July compared with 51.8 in June. This exceeded the median estimate of 51.7 projected by economists in a Bloomberg News survey. U.S. unemployment claims contracted by 19,000 to 284,000 for the week through July 19, the lowest since February 2006, reported the Washington-based Labor Department.

Meanwhile, the New Zealand dollar retreated more than 0.9 percent against its counterparts after the Reserve Bank of New Zealand Governor Graeme Wheeler disclosed that the currency’s level is “unjustified and unsustainable”. The kiwi fell 1.4 percent to trade at 85.77 U.S. cents after earlier declining 1.5 percent, the most since October 23. It also hit 85.68 cents, the weakest level since June 12. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com