Daily Afternoon Report 07/01/2016
The dollar pushed lower against the other major currencies today, after data showed that U.S. jobless claims fell less than expected last week and as fears over the outlook for China’s economy continued to support demand for the safe-haven yen and Swiss franc. The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending January 1 decreased by 10,000 to 277,000 from the previous week’s total of 287,000, which was the highest since mid-July.
Analysts expected jobless claims to fall by 12,000 to 275,000 last week.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.50% at 98.80.
The US Dollar had slightly weakened after the minutes of the Federal Reserve’s December meeting showed that some officials expressed concerns that inflation could remain at stubbornly low levels, even as they decided to hike interest rates.
Meanwhile, demand for the safe-haven yen strengthened after the People’s Bank of China set its official yuan midpoint rate lower compared with Wednesday’s fix. It was the largest daily drop in the midpoint rate since last August, when an unexpected almost 2% devaluation of the currency sparked a broad based selloff in markets. A weaker yuan would help boost Chinese exports.
Earlier today, data showed that German factory orders rose 1.5% in November, beating expectations for a 0.1% uptick.
A separate report showed that German retail sales rose 0.2% in November, disappointing expectations for a gain of 0.5%.
Elsewhere, the Australian Bureau of Statistics reported today that building approvals declined by 12.7% in November, compared to expectations for a 3.0% fall. Building approvals rose 3.3% in October, whose figure was revised from a previously estimated 3.9% increase. A separate report showed that Australia’s trade deficit narrowed to A$2.906 billion in November from A$3.247 billion in October, whose figure was revised from a previously estimated deficit of A$3.305 billion. Analysts had expected the trade deficit to hit A$3.100 billion in November.