Dollar falls on return of risk sentiment

The greenback fell across the board on Thursday except vs the safe-haven yen as a rally in global stocks triggered the return of risk sentiment. (Dow closed the day up by 506 points or 1.48% at 34,764)  
  
Reuters reported the number of Americans filing new claims for jobless benefits unexpectedly rose last week, though the labor market continues to steadily recover.    Initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 351,000 for the week ended Sept. 18, the Labor Department said on Thursday.  
  
Versus the Japanese yen, dollar traded with a firm undertone in Asia and gained to 110.00 in European morning on active cross-selling in jpy. Despite a brief pullback to 109.77 on China's Evergrande news, the pair rose to a 2-week high of 110.34 in tandem with U.S. yields in New York.  
  
Further news from Reuters, Chinese authorities are asking local governments to prepare for the potential downfall of debt-ridden China Evergrande Group 3333.HK, the Wall Street Journal reported on Thursday, citing officials familiar with the discussion.  
  
The single currency extended its post-FOMC selloff marginally to a fresh 4-week trough at 1.1684 in Asia, however, lack of follow-through selling triggered short-covering and the pair gained to 1.1732 in European morning as a rise in European stocks boosted risk appetite. Euro then ratcheted higher to an intra-day high at 1.1750 in New York morning on usd's broad-based weakness.  
  
The British pound found renewed buying at 1.3613 in Asia after Wednesday's selloff to 1.3610 near New York closing and gained to 1.3657 in early European morning. The pair then jumped ahead of New York open on the Bank of England's mildly hawkish tilt and rallied to an intra-day high at 1.3750 in New York together with active cross-buying in stg.  
  
Reuters said the Bank of England reported the inflation would rise above 4% later this year, and two policymakers called for an early end to the central bank's quantitative easing programme due to rising price pressures.    Policymakers voted 7-2 to stick with the 895 billion pound ($1.2 trillion) asset purchase target they set in November 2020, when the BoE's Monetary Policy Committee decided to buy a further 150 billion pounds of government bonds over the course of 2021.    BoE Deputy Governor Dave Ramsden joined Michael Saunders in voting for an early end to the programme of bond purchases.  
  
Data to be released on Friday:  
  
New Zealand imports, exports, trade balance, UK consumer confidence, Japan CPI, manufacturing PMI, Italy business confidence, consumer confidence, Germany Ifo business climate, Ifo current conditions, Canada budget balance and U.S. building permits, new home sales.