US dollar lost positions widely against other major currencies on Thursday after the release of weak economic data, casting aside speculations that FED would reduce scale of its easing program.
During European afternoon trade EUR/USD pushed higher, reaching 1.2980-1.2988.
Minutes ago official reports stated that Initial Jobless Claims in United States rose to 354 000 during the week until 25.05.2013, disappointing in comparison with expectations, which showed the number of people who filed for unemployment assistance would decrease to 340 000. Seasonally adjusted data during the previous week stated 344 000 claims by unemployed people. The indicator registered third consecutive increase during the last four weeks, signalizing that US labour markets momentum may be postponed. Average value of this indicator for the last four weeks, lacking distortion by seasonal effects, registered a rise by 6 750 to 347 250. Jobless claims, however, remained below 400 000, which level defines the line between stable and destabilized labour market, according to some experts. Ultimately, reported data indicated new hiring in US slowed down during April.
Additionally, it became clear that US Preliminary Gross Domestic Product (GDP) increased by a lower rate than expected during Q1 on annual basis, 2.4% instead of 2.5%. Previous period change showed a 2.5% increase of GDP. This could be a result of diminished corporate profits, implying of a vague economic recovery. US economy recorded 15 quarters of expansion, but growth rate, about 2% annually, was the weakest since World War II. During Q4 last year US GDP increased by merely 0.4%. Revised value could be a result of less accumulated inventories, which may give a positive signal, if US business is in need of output expansion in order to satisfy potentially increasing consumer demand.
Contrarily to last two indicators, US Consumer Spending rose by 3.4% during Q1 on annual basis, exceeding forecasts for a 3.3% increase, while the preceding period change showed a 3.2% rise. It became clear that Consumer Spending registered the largest increase since Q4 2010.
The dollar was higher versus the yen, with USD/JPY rising by 0.22% to 101.34. Meanwhile, greenback lowered against the British pound, with GBP/USD up by 0.24% to 1.5166.
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