Dollar regains traction after upbeat U.S. data

Market Review - 12/04/2019  00:09GMT  

Dollar regains traction after upbeat U.S. data

The greenback rose across the board on Thursday as U.S. jobless claims data which came in at its lowest since 1969 together with better-than-expected PPI data together with rising U.S. Treasury yields. The single currency continued to remain under pressure, weighed by ECB's dovish hold on Wednesday while sterling dropped on uncertainty over Brexit delay.   
  
Reuters reported the number of Americans filing applications for unemployment benefits dropped to a 49-1/2-year low last week, pointing to sustained labor market strength that could temper expectations of a sharp slowdown in economic growth.  
  
Initial claims for state unemployment benefits fell 8,000 to a seasonally adjusted 196,000 for the week ended April 6, the lowest level since early October 1969. Claims have now declined for four straight weeks. Data for the prior week was revised to show 2,000 more applications received than previously reported.  
  
Economists polled by Reuters had forecast claims would rise to 211,000 in the latest week. The Labor Department said no states were estimated last week.  
  
Reuters reported in the 12 months through March, the PPI rose 2.2 percent after advancing 1.9 percent in February. Economists polled by Reuters had forecast the PPI would climb 0.3 percent in March and increase 1.9 percent on a year-on-year basis.  
  
Versus the Japanese yen, dollar found renewed buying at 110.91 in Australia and rose to 111.12 at Asian open, and then ratcheted higher to 111.17 at European open. Intra-day gain accelerated at New York open and price rallied to +session highs at 111.69 on upbeat U.S. jobless claims data and rising U.S. Treasury yields.  
  
Although the single currency moved narrowly in Asia and edged up to 1.1289 (Reuters) at European open, renewed selling emerged there and knocked euro down to session lows at 1.1250 at New York open on usd's strength before trading broadly sideways in subdued New York session.  
  
The British pound went through a hectic session as investors remained uncertain about the result of the Brexit delay that was granted by the European Union which could last up to six months. Cable initially recovered to 1.3108 in Asia, and then retreated to 1.3079 at European open. Despite subsequent rise to session highs at 1.3109, price met renewed selling and swiftly dropped to 1.3059 before rebounding to 1.3099 but only to fall back to 1.3051 in New York on usd's strength.   
  
Reuters reported leaders of the 27 countries remaining in the European Union and British Prime Minister Theresa May have agreed to extend Britain's date of departure from the bloc until October 31, the chair of EU summits said in a tweet on Thursday.   
  
In other news, Reuters reported the U.S. economy would have to slow faster than expected or inflation move down a notch before the Federal Reserve should consider cutting interest rates, St. Louis Federal Reserve president James Bullard said on Thursday.   
  
Bullard, who cautioned against the December rate increase that the Fed approved, still said there is no need to cut rates as President Donald Trump has demanded. "We are going to need deviations to the downside on inflation or the real economy or both" to justify a rate cut, Bullard aid in comment to reporters.  
  
Data to be released on Friday :  
  
New Zealand manufacturing PMI, retail sales, Germany wholesale price index, China exports, imports, trade balance, Japan tertiary industry index, EU industrial production, and U.S. import prices, export prices, University of Michigan sentiment.