Dollar lower after initial jobless claims data with payrolls on tap

3 minute read
Register now for FREE unlimited access to Reuters.com

NEW YORK, Sept 2 (Reuters) - 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. read more

"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.

Register now for FREE unlimited access to Reuters.com

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 5.2% from 5.4%, 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. read more

"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 0.303% at 92.229, after falling as low as 92.219, its lowest level since Aug. 5.

The euro was up 0.31% to $1.1874.

Other data this week showed inflation rose 3% 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. read more

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. read more

The ECB is scheduled to hold a policy meeting on Sept. 9.

The Japanese yen strengthened 0.04% versus the greenback at 109.96 per dollar. Sterling was last trading at $1.3834, up 0.48%.

Among crytpocurrencies, Bitcoin broke the $50,000 mark for the first time since August 23 and last rose 0.98% to $49,333.82. Ethereum last fell 1.5% to $3,774.04 after touching a 3-1/2 month high of $3,837.20 on Wednesday.

========================================================

Currency bid prices at 3:11PM (1911 GMT)

Register now for FREE unlimited access to Reuters.com
Reporting by Chuck Mikolajczak; Editing by Hugh Lawson and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.