Dollar falls on return of risk sentiment

The greenback ended lower against majority of its peers, except versus the British pound on Thursday due to weakness in U.S. Treasury yields as well as a rally in global stocks triggered the return of risk sentiment. (Dow ended at 34548, up 318 points, or 0.93%)  
  
Reuters reported initial claims for state unemployment benefits totaled a seasonally adjusted 498,000 for the week ended May 1 compared to 590,000 in the prior week, the Labor Department said on Thursday. That was the lowest level since mid-March 2020, when mandatory shutdowns of nonessential businesses were enforced to slow the first wave of COVID-19 infections.     Economists polled by Reuters had forecast 540,000 applications in the latest week.  
  
Versus the Japanese yen, the dollar initially rose from 109.17 in Australia to session highs of 109.42 in Asia before falling to 109.07 in Europe on usd's broad-based weakness. The greenback then pared intra-day losses and rebounded to 109.39 in early New York morning but only to tumble to an intra-day low of 109.01 on weakness in U.S. Treasury yields.  
  
The single currency found renewed buying at 1.1994 in Asia and rallied to 1.2052 in Europe. The pair then ratcheted higher to session highs of 1.2071 in early New York morning due to broad-based retreat in usd on return or risk sentiment before retreating to 1.2045 on profit-taking. Price then rebounded to 1.2065 near the close.  
  
The British pound traded broadly sideways in Asia and then met renewed selling at 1.3922 in Europe. Price briefly tumbled to session lows of 1.3858 before rallying to an intra-day high of 1.3942 (Reuters) after the Bank of England kept interest rates unchanged but slowed down bond-buying. However, the pair then retreated sharply to 1.3864 in New York due to cross-selling in sterling before recovering to 1.3899 near the close.  
  
Reuters reported the Bank of England said it would slow the pace of its bond-buying as it sharply increased its forecast for Britain's economic growth this year after its coronavirus slump, but it stressed it was not tightening monetary policy.    The BoE kept its benchmark interest rate at an all-time low of 0.1% and the total size of its bond-buying programme unchanged at 895 billion pounds ($1.24 trillion), as expected by economists polled by Reuters.    The central bank said it would slow its bond-buying to 3.4 billion pounds a week, down from its current pace of 4.4 billion pounds a week.  
  
Data to be released on Friday :  
  
Australia AIG services index, Japan Services PMI, China Caixin services PMI, exports, imports, trade balance, New Zealand inflation forecast, Swiss unemployment rate, Germany industrial output, exports, imports, trade balance, current account, France current account, industrial output, non-farm payrolls, trade balance, imports, exports, Italy retail sales, U.K. Markit construction PMI, U.S. non-farm payrolls, private payrolls, unemployment rate, average earnings, wholesale inventory, wholesale sales, Canada employment change, unemployment rate, Ivey PMI.