* US continuing claims rise; underlying inflation benign
* US dollar giving back overnight gains
* Aussie dollar falls to lowest since Aug 2010
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 16 The dollar slid on Thursday,
pressured by data showing a jump in U.S. continuing jobless
claims, but losses were viewed as temporary after two days of
gains as the greenback's uptrend remained intact.
Many market participants believed Thursday's jobless numbers
would not alter the course of the Federal Reserve's reduction of
its asset-buying program.
The Australian dollar, meanwhile, tumbled against the U.S.
dollar to its lowest since August 2010 after a surprise fall in
Australian employment raised the possibility of another cut in
interest rates from the Reserve Bank of Australia.
In the United States, continuing claims rose 174,000 to
3.030 million in the week ending Jan. 4, which was the highest
weekly figure since a one-week spike up reported last July.
Initial claims for state unemployment benefits, however slipped
2,000 to a seasonally adjusted 326,000.
"The dollar's fall may reflect bigger-than-expected
continuing claims and some could see that as an argument for the
labor market being not too strong," said Shahab Jalinoos,
currency strategist, at UBS in Stamford, Connecticut.
"In the long run, however, these numbers would be not so
relevant. The intraday ranges we're seeing right now are fairly
muted and it comes after an overnight session where the dollar
was actually quite strong."
Other data on Thursday showed consumer prices in December
recorded their largest increase in six months as gasoline prices
rebounded. There was, however, little to suggest a broader
pick-up in prices given tame underlying inflation.
The dollar index, a measure of the greenback's value against
six major currencies, fell 0.2 percent to 80.884.
The euro rose 0.1 percent to $1.3619, while the
dollar slid 0.3 percent to 104.29 yen.
The Aussie dollar fell as low as US$0.8777, the lowest since
late August 2010 and was last down 1.2 percent at US$0.8812
Australian employers shed jobs at the fastest pace in nine
months in December, with full-time positions hit particularly
hard, contrary to economists' expectations of modest job gains
Investors reacted by reviving talk of another cut in
interest rates from the Reserve Bank of Australia, which has
been signaling it would rather not ease again from the current
record low of 2.5 percent.
Computer-driven hedge funds, meanwhile, have latched onto
the currency's slide.
Richard Perry, analyst at Hantec Markets, said that while
technical factors suggest there could be a small bounce in the
Aussie, it could meet resistance between $0.8820 and $0.8863.
"I'd be using that technical rally as a chance to sell. It
does not look good," he said.