The dollar has been losing ground against all of its major competitors for the majority of the trading week. That trend continued on Thursday, as investor concerns that the Federal Reserve may act soon to taper its stimulus measures weighed on the U.S. currency.
First-time claims for U.S. unemployment benefits showed a modest increase in the week ended August 3rd, according to a report released by the Labor Department on Thursday, although claims still came in below economist estimates.
The report showed that initial jobless claims edged up to 333,000, an increase of 5,000 from the previous week’s revised figure of 328,000. Economists had expected jobless claims to climb to 336,000 from the 326,000 originally reported for the previous week.
Japan’s central bank announced on Thursday its decision to keep its monetary easing program unchanged, as the economy has begun to recover moderately and inflation data has turned positive. At the end of a two-day meeting, the nine-member Policy Board led by Governor Haruhiko Kuroda decided to retain its plan to increase the monetary base at an annual pace of JPY 60-70 trillion.
Bank of Japan Governor Haruhiko Kuroda on Thursday urged the government to adhere to fiscal consolidation measures and said the planned two-stage hike in sales tax is consistent with the central bank’s aim of ending deflation.
He said that the absence of fiscal tightening will jeopardize the bank’s massive bond purchase program, if markets feel that the BoJ is monetizing debt. Lack of strong commitment on fiscal discipline will eventually push up long term interest rates, Kuroda warned.
The dollar has been retreating against the Japanese Yen since hitting a high of Y99.951 on August 2, falling to Y95.813 on Thursday, its lowest level since June 18th.
Japan posted a current account surplus of 336.3 billion yen in June, the Ministry of Finance said on Thursday, remaining in the green for the fifth straight month after three consecutive months of deficit. The headline figure missed forecasts for a surplus of 400.0 billion yen following the 540.7 billion yen surplus in May.
Japan economy watchers’ assessment of current situation deteriorated for the fourth consecutive month in July, survey data from Cabinet Office showed Thursday. The current conditions index fell unexpectedly to 52.3 in July from 53 in June. Economists had forecast the index to rise to 53.5.
Professional forecasters downgraded their Eurozone economic outlook citing weak domestic demand and the subdued outlook for exports to China and Brazil. According to results of the Survey of Professional Forecasters released Thursday with the European Central Bank monthly bulletin, real gross domestic product will shrink 0.6 percent in 2013, sharper than the 0.4 percent drop estimated in the previous survey period.
The greenback has been losing ground against the Euro since the end of the previous trading week, falling to a month and a half low of $1.3394 on Thursday, from the high of $1.3192 at the end of July.
Germany’s exports recovered in June underpinned by robust demand from non-euro area nations, while imports dropped unexpectedly from a month ago, reflecting a weakness in domestic demand.
Reversing a revised 2 percent fall in May, exports expanded 0.6 percent month-on-month in June, a report released by the Federal Statistical Office showed Thursday. Nonetheless, the rate of growth was weaker-than the 0.9 percent forecast by economists.
Meanwhile, imports fell 0.8 percent after rising revised 1.4 percent in May. Economists had forecast imports to grow at a moderate pace of 0.5 percent.
Driven by an increase in exports and fall in imports, the trade surplus increased to EUR 16.9 billion from a revised EUR 13.6 billion in the previous month.
Germany’s manufacturing sector turnover declined for a second consecutive month in June, the latest figures from the Federal Statistical Office revealed Thursday. On a seasonal and working day adjusted basis, factory sales fell 0.5 percent month-on-month in June following a 0.8 percent decline in May and 1 percent growth in April.
The Bank of England’s new Governor Mark Carney said the 2 percent inflation target remains the primary objective. On Wednesday, the BoE linked its interest rate outlook to unemployment for the first time in its history.
The buck has also extended its weakness against the pound sterling to a month and a half low of $1.5569 on Thursday, from a high of $1.5109 at the end of July.