Daily Afternoon Report 10.12.2015

The dollar remained broadly supported against the other major currencies on Thursday, after data showed that U.S. jobless claims rose more than expected last week, but remained in territory usually associated with a firming labor market.

USD/JPY was steady at 121.42.

The U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending December 4 increased by 13,000 to 282,000 from the previous week’s total of 269,000. Analysts expected jobless claims to hold steady at 269,000 last week.

Demand for the dollar continued to be underpinned by expectations that the Fed is on track to raise interest rates for the first time since 2006 at its upcoming meeting on December 15-16.

Higher interest rates would make the dollar more attractive to yield-seeking investors.

EUR/USD slid 0.62% to 1.0953.

The euro still remained supported after the latest round of easing announced by the European Central Bank fell well short of market expectations.

Elsewhere, the dollar was higher against the pound and the Swiss franc, with GBP/USD down 0.23% at 1.5146 and with USD/CHF gaining 0.33% to 0.9864.

Sterling weakened after dovish Bank of England meeting minutes indicated that interest rates are likely to remain on hold at record lows for longer.

The Monetary Policy Committee voted eight-to-one to keep rates on hold at 0.5%. Ian McCafferty, one of four external members on the nine-person MPC, voted to increase rates to 0.75%.

The minutes came after data showed that the U.K. trade deficit widened to £11.83 billion in October from £8.8 billion the previous month. Economists had expected the trade deficit to widen to £9.7 billion in October.

Also Thursday, the Swiss National Bank kept interest rates unchanged and said it was still prepared to intervene in the currency markets to weaken the highly-valued Swiss franc.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.86% at 0.7292 and with NZD/USD advancing 0.49% to 0.6753.

Earlier Thursday, the Reserve Bank of New Zealand lowered its benchmark interest rate from 2.75% to 2.50%, in a widely expected move.

In Australia, data showed that the number of employed people increased by 71,400 in November, confounding expectations for a 10,000 decline.

The unemployment rate ticked down to 5.8% last month from 5.9% in October, compared to expectations for a rise to 6.0%.

Separately, the Melbourne Institute said that its inflation expectations for the next 12 months rose to 4.0% last month from 3.5% in October.

Meanwhile, USD/CAD eased 0.10% to trade at 1.3565.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.43% at 97.76, off the previous session’s one-month low of 97.21.