NEW YORK : The dollar weakened on Thursday following strong labor market data, while the euro remained near a one-month high versus the greenback after European Central Bank policymakers made comments that kept inflation concerns in focus.
U.S. weekly initial jobless claims fell last week, and layoffs dropped to their lowest in more than 24 years. Still, rising COVID-19 cases in recent weeks have threatened the economic recovery, keeping the Federal Reserve from pulling back on its massive stimulus.
"It was better than expected but it wasn’t enough to change anyone’s views about what is going on, or the pace of tapering or what Friday’s number might be. It was just within the range of estimates," said Marshall Gittler, head of investment research at BDSwiss.
On Wednesday, the ADP National Employment Report was much weaker than expected. On Friday, the U.S. government will report on payrolls for August. Nonfarm payrolls are expected to rise by 750,000, with the unemployment rate anticipated to dip to 5.2per cent from 5.4per cent, according to Reuters estimates.
The dollar has been subdued on uncertainty over Fed policy. Last Friday, Fed chair Jerome Powell said that tapering of its stimulus could begin this year, yet the central bank was in no hurry.
"They’ve pretty much nailed their colors to the mast, they said unless all hell breaks loose they are going to start tapering this year, so we would have to see a massive miss or probably several massive misses for them to delay it," said Gittler.
Other data showed new orders for U.S.-made goods rose in July, while business spending on equipment remained strong, despite supply constraints and spending trends moving away from goods towards services.
The dollar index fell 0.303per cent at 92.229, after falling as low as 92.219, its lowest level since Aug. 5.
The euro was up 0.31per cent to US$1.1874.
Other data this week showed inflation rose 3per cent in the euro zone for August, which helped push the euro to a one-month high of 1.8745, its highest since Aug. 4. On Thursday, data showed manufacturing remained strong in the region but supply chain issues sent prices higher.
Recent comments from European Central Bank hawks including Austria's Robert Holzman and Bundesbank boss Jens Weidman also supported the single currency. ECB President Lagarde said the region was recovering from the pandemic and only needed "surgical" support.
The ECB is scheduled to hold a policy meeting on Sept. 9.
The Japanese yen strengthened 0.04per cent versus the greenback at 109.96 per dollar. Sterling was last trading at US$1.3834, up 0.48per cent.
Among crytpocurrencies, Bitcoin broke the US$50,000 mark for the first time since August 23 and last rose 0.98per cent to US$49,333.82. Ethereum last fell 1.5per cent to US$3,774.04 after touching a 3-1/2 month high of US$3,837.20 on Wednesday.
Currency bid prices at 3:11PM (1911 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
92.2250 92.5090 -0.30per cent 2.494per cent +92.5360 +92.2190
US$1.1874 US$1.1840 +0.29per cent -2.82per cent +US$1.1875 +US$1.1834
109.9650 110.0500 -0.07per cent +6.43per cent +110.1200 +109.9150
130.57 130.26 +0.24per cent +2.88per cent +130.5900 +130.1700
0.9146 0.9158 -0.13per cent +3.38per cent +0.9167 +0.9140
US$1.3834 US$1.3768 +0.50per cent +1.27per cent +US$1.3839 +US$1.3768
1.2556 1.2618 -0.49per cent -1.40per cent +1.2637 +1.2552
US$0.7401 US$0.7369 +0.45per cent -3.78per cent +US$0.7409 +US$0.7356
1.0860 1.0840 +0.18per cent +0.49per cent +1.0864 +1.0834
0.8582 0.8597 -0.17per cent -3.97per cent +0.8603 +0.8577
Dollar/Dollar US$0.7111 US$0.7070 +0.64per cent -0.91per cent +US$0.7120 +US$0.7058
8.6535 8.6990 -0.44per cent +0.86per cent +8.7035 +8.6480
10.2771 10.2920 -0.14per cent -1.81per cent +10.3100 +10.2530
8.5729 8.5990 -0.15per cent +4.59per cent +8.6196 +8.5723
10.1805 10.1957 -0.15per cent +1.03per cent +10.2062 +10.1740
(Reporting by Chuck Mikolajczak; Editing by Hugh Lawson and David Gregorio)