The dollar is solidly lower against all of its major competitors on Thursday. Stronger than expected economic data from the Eurozone is contributing to the currency’s weakness against the Euro. The Japanese Yen is gaining ground after weak Chinese data has spooked investors into flocking to the safe haven.
After reporting first-time claims for U.S. unemployment benefits at their lowest level in over a month in the previous week, the Labor Department released a report on Thursday showing a smaller than expected rebound in claims in the week ended January 18th.
The report said initial jobless claims edged up to 326,000, an increase of 1,000 from the previous week’s revised figure of 325,000. Economists had expected claims to climb to 330,000 from the 326,000 originally reported for the previous week.
Existing home sales in the U.S. rebounded in December after seeing a sharp drop in the previous month, according to a report released by the National Association of Realtors on Thursday. NAR said existing home sales climbed 1.0 percent to an annual rate of 4.87 million in December after tumbling 5.9 percent to a downwardly revised 4.82 million in November.
Economists had expected existing home sales to edge up to 4.93 million from the 4.90 million originally reported for the previous month, reflecting a 0.6 percent increase.
Partly reflecting improvements in the financial components, the Conference Board released a report on Thursday showing a modest increase by its index of leading U.S. economic indicators in the month of December.
The Conference Board said the leading economic index edged up by 0.1 percent in December following an upwardly revised 1.0 percent increase in November. Economists had expected the index to rise by about 0.2 percent compared to the 0.8 percent advance originally reported for the previous month.
The dollar has dropped to a 1-week low of $1.3684 against the Euro on Thursday, from yesterday’s high of $1.3534.
Eurozone’s private sector growth accelerated more-than-expected in January, led by a further strong expansion in Germany, with both the manufacturing and service sectors recording above-trend improvement in business activity.
Data published by Markit Economics on Thursday showed that the activity indicator for the euro area private sector climbed to 53.2 from 52.1 in December, and stayed above the no-change 50 mark for the seventh successive month.
This month’s score signaled the sharpest improvement in operating conditions since June 2011. Economists had expected the index to rise to 52.5.
The pickup in overall activity was driven by a marked improvement in the manufacturing sector, where the purchasing managers’ index jumped to a 32-month high of 53.9 from 52.7 in December. Expectations were for a score of 53.
At the same time, the PMI for the service sector rose to a four-month high of 51.9 in January from 51 in December. Economists were looking for a reading of 51.4.
Germany continued to lead the euro area recovery. The activity indicator for the German private sector moved up to 55.9 in January from 55 in December, marking the fastest improvement in operating conditions in over two-and-a-half years. Both, the manufacturing sector and the service sector posted strong growth.
French private sector business activity declined at a slower pace in January, with the composite output index rising to 48.5 in January from 47.3 in December. The rest of the region also saw a strengthening upturn, the survey showed.
There is no immediate need to hike the Bank of England’s key policy rate even if the 7 percent unemployment rate threshold is reached in the near future, BoE Executive Director for Markets Paul Fisher said Thursday.
The greenback extended its recent losses against the pound sterling to a third consecutive session Thursday, falling to over a 2 1/2 year low of $1.6635, but has since risen back to around the $1.6600 level.
The Bank of Japan’s aggressive monetary easing has supported an increase in consumer prices in the country, but it may take more than two years for Japan to attain the bank’s 2 percent price stability target, International Monetary Fund Deputy Managing Director Naoyuki Shinohara said in Tokyo on Thursday.
The buck has dropped to over a 1-week low of Y103.482 against the Japanese Yen on Thursday, from an early high of Y104.830.
Japan’s corporate loan demand increased for the second consecutive time in the fourth quarter, the latest Senior Loan Officer Opinion survey from the Bank of Japan showed Thursday. The balance of demand for loans from firms rose to 8 during October to December from 4 in the prior quarter. Meanwhile, demand from households fell to 11 from 16.