Daily Afternoon Report 14.05.2015

The dollar remained at four-month lows against a basket of other major currencies on Thursday, as data showing that U.S. jobless claims fell unexpectedly last week failed to fuel optimism over the strength of the country’s economy. In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 9 fell by 1,000 to 264,000 from the previous week’s total of 265,000. Analysts had expected initial jobless claims to rise by 10,000 to 275,000 last week. A separate report showed that U.S. producer prices fell 0.4% in April, compared to expectations for a 0.2% rise, after an uptick of 0.2% the previous month. Core producer prices, which exclude food, energy and trade, slipped 0.2% last month, confounding expectations for a 0.1% gain, after a 0.2% rise in March. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.47% to 93.32, the lowest level since January. EUR/USD was up 0.50% to 1.1409, after reaching two-and-a-half month highs of 1.1444 earlier in the session. The single currency remained supported as German and U.S. bund yields rose to the highest level in five months as a broad based selloff in global bond markets continued. Germany 10-year bund yields rose to 0.712 on Thursday, the highest since early December. German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar. Yields rise as prices fall.
The pound remained at a six-month peak, with GBP/USD up 0.28% to 1.5789. Elsewhere, the dollar was steady against the yen, with USD/JPY at 119.16 and lower against the Swiss franc, with USD/CHF sliding 0.47% to 0.9122. The Australian dollar was little changed, with AUD/USD at 0.8105, while NZD/USD rose 0.28% to 0.7510. Statistics New Zealand earlier reported that retail sales increased by 2.7% in the first quarter, exceeding expectations for a 1.5% rise, after a 1.7% gain in the three months to December. Core retail sales, which exclude automobiles and gas stations, rose 2.9% in the three months to March, beating expectations for a 1.5% gain. The change in core retails for the last quarter of 2014 was revised to a 1.9% increase from a previously estimated 1.5% rise. A separate report showed that New Zealand’s Business Manufacturing Index slipped to 51.8 last month from 54.6 in March, whose figure was revised from a previously estimated reading of 54.5. USD/CAD held steady at 1.1966 after Statistics Canada reported that new house prises were flat in March, compared to expectations for a 0.1% uptick, after a 0.2% gain the previous month.