U.S. dollar dips from 1-year high on soft data, consolidation

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© Reuters. FILE PHOTO: U.S. dollar banknotes are seen in this photo illustration taken February 12, 2018. REUTERS/Jose Luis Gonzalez/Illustration/File Photo

By Gertrude Chavez-Dreyfuss and Ritvik Carvalho

NEW YORK/LONDON (Reuters) -The dollar slipped from a one-year high on Thursday in choppy trading, pressured a little bit by a rise in U.S. weekly jobless claims, and as investors consolidated gains after a steep rise the last few sessions.

The greenback overall has been supported by the spike in U.S. Treasury yields amid expectations the Federal Reserve will taper its monetary stimulus beginning in November even as global growth slows.

Thursday’s economic data, though, dented some of the dollar’s strength.

U.S. initial jobless claims rose for a third straight week to 362,000 for the period ending Sept. 25, data showed. Economists polled by Reuters had forecast 335,000 jobless applications for the latest week.

That said, another report confirmed that U.S. economic growth accelerated in the second quarter, at a 6.7% clip, thanks to pandemic relief money from the government, which boosted consumer spending.

“Mixed data has tapped a brake on the dollar’s surge to fresh highs,” said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.

“Q2 growth proved a tick stronger, but jobless claims added to the mixed picture for the labor market. The third straight weekly rise in jobless claims suggests any improvement in September hiring might be more muted,” he added.

The dollar index, which measures the currency against a basket of six rivals, hit 94.504, its highest since Sept. 28 last year. It was last down slightly at 94.287.

“The dollar’s surge that lifted it to new highs for the year yesterday against the euro, yen, and sterling, has eased today and a consolidative tone is evident,” wrote Marc Chandler, chief market strategist at Bannockburn Forex, in a research note.

“Its pullback so far today has been shallow, suggesting it may not be over.”

The dollar’s recent gains came despite a political standoff in Washington over the U.S. debt ceiling that threatens to shut down much of the government.

Yields on the benchmark 10-year Treasury note stood at 1.541%, holding near a three-month high reached Tuesday at 1.5670%.

The dollar hit 112.07 yen, the highest since February 2020. It was last down 0.2% at 111.815 yen, but on track for its best monthly performance since February.

The euro was down at $1.1585, after earlier hitting $1.1568,its lowest since July 2020.

“We continue to see the risk to the downside in spot (euro) amid this new low of the year,” said Kristoffer Kjær Lomholt, chief analyst at Danske Bank.

“A cyclical slowdown, higher real rates in 0-5yr, as means to weigh on global inflation, central bank divergence and valuations are generally all inputs that suggest a weaker EUR/USD.”

The risk-sensitive Australian dollar firmed 0.7% to US$0.7221, after plummeting 0.9% overnight, as iron ore prices rallied ahead of the Golden Week holiday in Australia’s top trading destination China.

A slight improvement in overall risk sentiment after days of gloom was seen in the cryptocurrency markets, as bitcoin rose 3.8% to $43,142 and ether bounced 4.5% to $2,979.

Both coins are down between 20% and 27% from their September peaks.

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Currency bid prices at 10:00AM (1400 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 94.3270 94.3440 +0.00% 4.830% +94.5040 +94.2330

Euro/Dollar $1.1582 $1.1598 -0.14% -5.21% +$1.1610 +$1.1568

Dollar/Yen 111.7800 111.9750 -0.17% +8.18% +112.0750 +111.7100

Euro/Yen 129.46 129.82 -0.28% +2.00% +129.9500 +129.4800

Dollar/Swiss 0.9353 0.9346 +0.08% +5.73% +0.9368 +0.9329

Sterling/Dollar $1.3478 $1.3427 +0.39% -1.34% +$1.3496 +$1.3417

Dollar/Canadian 1.2731 1.2753 -0.17% -0.02% +1.2763 +1.2713

Aussie/Dollar $0.7222 $0.7174 +0.69% -6.10% +$0.7230 +$0.7176

Euro/Swiss 1.0832 1.0839 -0.06% +0.23% +1.0847 +1.0817

Euro/Sterling 0.8591 0.8636 -0.52% -3.87% +0.8643 +0.8591

NZ $0.6893 $0.6866 +0.40% -4.01% +$0.6897 +$0.6860

Dollar/Dollar

Dollar/Norway 8.7480 8.7860 -0.59% +1.71% +8.8295 +8.7340

Euro/Norway 10.1341 10.1740 -0.39% -3.17% +10.2315 +10.1200

Dollar/Sweden 8.7737 8.8067 -0.50% +7.04% +8.8118 +8.7498

Euro/Sweden 10.1635 10.2141 -0.50% +0.86% +10.2167 +10.1430

U.S. dollar dips from 1-year high on soft data, consolidation

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