Dollar Rallies Broadly on Short Covering : Jun 10, 2016
The greenback pushed higher against the other major currencies on
Thursday as the release of upbeat U.S. jobless claims data boosted
optimism over the strength of the economy.
Versus the Japanese yen, dollar came under renewed selling pressure after recovering from 106.52 to 106.81 in Asia and later fall to a fresh 1-month trough at 106.25 in European morning before recovering. Later, price pushed higher to 106.64 and then 106.88 in New York session as as the release of upbeat U.S. jobless claims data boosted optimism over the strength of the economy.
The U.S. Department of Labor said on Thursday that the number of individuals filing for initial jobless benefits in the week ending June 4 decreased by 4,000 to 264,000 from the previous week's total of 268,000, which was revised up from the initial read of 267,000. Market had expected jobless claims to rise by 3,000 to 270,000 last week.
The single currency came under selling pressure after an initial rise to a fresh 1-month peak at 1.1416 in Asia and then fell to as low as 1.1306 in New York morning after comments fm ECB's President Mario Draghi before recovering.
ECB President Mario Draghi's speech at the Brussels Economic Forum 2016, he said 'I can only underline in this context the costs of postponing the reform of eu and euro area governance that all agree is necessary; we do not let inflation undershoot our objective for longer than is avoidable given the nature of the shocks we face.'
Elsewhere, ECB governing council Francois Villeroy said on Thursday, 'in closed meeting to German Bundestag on Wednesday as long as inflation is too low, as is the case today, we must take action; wants France to speed up necessary reforms; of course i don't want a Brexit; regardless of what Britain decides the euro zone must push on with integration; the economy in Europe is recovering but growth is not strong enough to convince eurosceptics.'
The British pound came under renewed selling pressure at 1.4527 in European morning and then fell to a session low of 1.4447. Later, although active cross-buying in sterling especially versus euro lifted price to 1.4508 in New York morning, price retreated to 1.4447 again before stabilising.
In other news, Reserve Bank of New Zealand kept its cash rate unchanged at 2.25 percent. Reuters later reported New Zealand's central bank held rates on Thursday and retained an easing bias, noting that inflation pressures were stabilising and high house prices were a concern. Reserve Bank of New Zealand governor Graeme Wheeler said at a media conference the bank would not "hesitate" to adjust interest rates if needed. He added that some inflation pressures were beginning to come through.
Data to be released on Friday:
New Zealand Electronic Card retail sales, Japan domestic corporate goods price index, Germany CPI, Harmonised index of consumer prices, France industrial output, Italy industrial output, Canada unemployment rate, employment change, participation rate and U.S. the Reuters/Michigan consumer sentiment index