Dollar Surges vs Euro after Robust U.S. Jobless Report
The dollar surged against the euro Thursday after an encouraging U.S. unemployment claims report stoked speculation about the Federal Reserve's plan to raise ultra-low interest rates.
The Labor Department reported that the number of first-time unemployment claims rose last week, but claims filed in the past four weeks fell to a nearly 15-year low, suggesting a stronger labor market.
"U.S. initial claims support our view that the economy hit nothing more than an air pocket in the first quarter," said Ryan Sweet of Moody's Analytics.
The euro tumbled to $1.0659 around 2100 GMT from $1.0780 at the same time Wednesday.
Vassili Serebriakov at BNP Paribas said that the dollar was still getting some help from the prospect of higher U.S. interest rates in the coming months.
The dollar had climbed against the euro Wednesday following the publication of the minutes of the Federal Reserve's last policy meeting, which showed participants were divided on when the timing would be right to raise near-zero interest rates.
The minutes of the March 17-18 meeting, held before the dismal March jobs report last Friday, countered an earlier market conviction that a June rate hike was now off the table.
"There wasn't much new in the minutes, but there's a big disconnect between the minutes which debated June and market pricing which is debating whether the Fed is going to raise rates at all," he said.
"It's a reminder that the base case for Fed hikes in the middle of the year remains intact."
Serebriakov said the euro lacked demand as the European Central Bank pursues a massive bond-purchase program to stimulate the tepid eurozone.
The Greek debt bailout crisis was important for the direction of the shared currency but "it's not a trend driver".
2100 GMT Thursday Wednesday
EUR/USD 1.0659 1.0780
EUR/JPY 128.55 129.52
EUR/CHF 1.0418 1.0419
EUR/GBP 0.7246 0.7251
USD/JPY 120.59 120.14
USD/CHF 0.9773 0.9664
GBP/USD 1.4710 1.4867
Source: Agence France Presse
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