The greenback ended the day higher against majority of its peers except vs the safe-haven jpy and chf as a rise in U.S. yields and drop in global stocks triggered broad-based risk-aversion.
Reuters reported the number of Americans filing new claims for unemployment benefits dropped to a 19-month low last week, pointing to a tightening labor market, though a shortage of workers could keep the pace of hiring moderate in October. Initial claims for state unemployment benefits fell 6,000 to a seasonally adjusted 290,000 for the week ended Oct. 16, the lowest level since the middle of March in 2020, when the nation was in the early stage of the COVID-19 pandemic.
Versus the Japanese yen, dollar met renewed selling at 114.41 in Australia and dropped to 113.92 at European open on active cross-unwinding in jpy. Despite staging a brief rebound to 114.20 at New York open, the pair then tumbled to an intra-day low at 113.66 in New York morning on risk-averse buying in jpy before rebounding to 114.04 in tandem with U.S. yields.
The single currency traded with a firm bias in Asia and gained to session highs at 1.1667, price met renewed selling there and dropped to 1.1632 at New York open before ratcheting lower to an intra-day low of 1.1620 on risk-averse buying in usd together with cross-selling of euro especially vs sterling.
The British pound met renewed selling at 1.3834 in Asian morning and dropped to 1.3787 in European morning n despite staging a rebound to 1.3824 in New York morning on cross-buying of sterling, the pair then tumbled to an intra-day low of 1.3776 on broad-based rebound in usd before stabilising.
In other news from Reuters, U.S. Federal Reserve should let its $8 trillion balance sheet reduce over the next couple of years, Fed Governor Christopher Waller said on Thursday. "There is no reason to keep it that big really so why not let it just naturally run off as securities mature... let the balance sheet shrink back down to some other, smaller size and that way you have more space if you need to later to push it back up," Waller said at a virtual event hosted by the Official Monetary and Financial Institutions Forum.
Data to be released on Friday:
Australia manufacturing PMI, services PMI, U.K. Gfk consumer confidence, retail sales, Markit manufacturing PMI, Markit services PMI, Japan nationwide CPI, Jibun bank manufacturing PMI, France Markit manufacturing PMI, Markit services PMI, Germany Markit manufacturing PMI, Markit services PMI, EU Markit manufacturing PMI, Markit services PMI, Italy producer prices, Canada retail sales, U.S. Markit manufacturing PMI and Markit services PMI.
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