Daily Afternoon Report 21.01.2016

The dollar rose to one-and-a-half month highs against the other major currencies on Thursday, after U.S. jobless claims rose unexpectedly to the highest level since April, but remained in territory usually associated with a firming labor market.

USD/JPY held steady at 116.92, off overnight lows of 116.47 and holding above the one-year low of 115.95 hit on Wednesday.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending January 15 increased by 10,000 to 293,000 from the previous week’s total of 283,000. Analysts expected jobless claims to fall by 5,000 to 278,000 last week.

In addition, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved to -3.5 this month from December’s reading of -5.9. Analysts had expected the index to hit -5.0 in December.

Oil prices slid again on Thursday, re-approaching the 12-year lows hit in Wednesday’s session as a global supply glut continued to pressure prices.

The dollar weakened against the safe-haven yen on Wednesday as the plunge in oil prices added to fears over slowing global growth.

The ongoing oil rout continued to weigh on the commodity-related Canadian dollar. USD/CAD was down 0.60% at 1.4413 but remained close to the previous session’s 13-year peak of 1.4692.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.25% at 0.6924 and with NZD/USD adding 0.19% to trade at 0.6442.

Meanwhile, EUR/USD tumbled 0.90% to 1.0785.

The European Central Bank said it was maintaining its benchmark interest rate at a record-low 0.05%, in line with market expectations. The central bank also left its deposit facility rate unchanged at -0.30% and left its marginal lending at 0.30%.

Elsewhere, the dollar was higher against the pound and the Swiss franc, with GBP/USD down 0.60% at fresh five-year lows of 1.4107 and with USD/CHF gaining 0.72% to 1.0114.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.64% at 99.81, the highest level since December 3.