(Recasts, updates prices, adds analyst comment, U.S. data,
changes byline; dateline; previous LONDON)
* U.S. initial jobless claims rise, data weighs on dollar
* U.S. dollar outlook remains bright
* Euro zone data seen not as bad as expected
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 14 The dollar weakened broadly on
Thursday, falling after three straight days of gains, on yet
another piece of data suggesting a bumpy recovery for the U.S.
An increase in the weekly U.S. jobless claims came a day
after an unexpectedly flat retail sales report, which reinforced
expectations the Federal Reserve would be in no rush to raise
interest rates. Higher interest rates tend to enhance the
dollar's appeal as they boost the yield of some U.S. assets.
Data showed on Thursday that the number of Americans filing
new claims for unemployment benefits rose more than expected
last week. Initial claims for state unemployment benefits
increased 21,000 to a seasonally adjusted 311,000 for the week
ended Aug. 9, higher than economists' expectations for a rise to
"The soft (jobless claims) data ... further dents some of
the dollar's recent allure," said Omer Esiner, chief market
analyst at Commonwealth Foreign Exchange in Washington, although
he remained bullish on the greenback.
The outlook for the dollar this year remained upbeat, many
analysts said, compared to that of the euro and yen, whose
economies are still struggling. An already sluggish euro zone
economy has further hit a rough patch with the negative impact
of the Russia-Ukraine crisis on Germany, the euro zone's largest
Japan, meanwhile, remained mired in recession, with the
economy contracting 6.8 percent in the second quarter. Some
strategists have called for the dollar to hit 109 yen by the end
of the year. The dollar was last flat on the day at 102.42 yen
"The divergence in outlook between the U.S. and many other
industrialized economies remains a key pillar of support for the
dollar," Commonwealth's Esiner said.
In mid-morning trading, the dollar index, fell 0.2 percent
The euro, meanwhile, rose 0.2 percent to $1.3394,
with many investors relieved the euro zone as a whole did not
shrink in the second quarter, despite Germany's contraction.
Though euro area growth stalled in April-June, missing
modest expectations of 0.1 percent, the numbers provided some
respite for the euro after the weaker-than-expected data from
Germany and France. The latter has failed to produce any growth
at all since the start of the year.
The final reading for euro area inflation of 0.4 percent in
July on an annualised basis, though weak, was in line with
"You did see a little bit of a down-move on the German and
French data this morning but by the time you'd got to (the data
for) the euro area as a whole ... the consensus had moved," said
Marvin Barth, European head of currency strategy at Barclays.
German 10-year bond yields briefly traded
below 1 percent for the first time ever after the disappointing
data from the supposed powerhouse of Europe.
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Jemima Kelly in London; Editing by Nick Zieminski)