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US dollar pared losses against the euro after US data

EUR_USD_story_fullThe dollar erased earlier losses against the euro on Thursday after official report showed that US jobless claims decreased, meeting expectations.

EUR/USD fell to 1.3023 at 12:48 GMT, after which consolidated in the 1.3030-1.3035 range.

Minutes ago, the Department of Labor in the United States reported that the number of people, filed for unemployment assistance, in the country decreased to 346 000 during the week, ending on 22.06.2013. Experts had projected that jobless claims would fall to 345 000. During the previous period this indicator showed 354 000 claims. Data implied a slow recovery of US labour market. Average value of the indicator, which lacks seasonal effects, decreased by 2 750 to 345 750 claims for the past four weeks. Jobless claims have registered a moderate increase since April and experts think this indicator will be under close surveillance in the future. Questions remained whether US employers will be able to maintain picked up momentum, especially after the effects from government expenditure reduction kick in, while the Federal Reserve cuts Quantitative Easing.

Another report said that Personal Income in the United States rose by 0.5% in May on a monthly basis, above the expected 0.2% rise, while Personal Spending rose by 0.3% in May in line with preliminary estimates. This could be a signal of ongoing consumer support to economic recovery. Consumer expenditures are a major component of US Gross Domestic Product and a main driving force behind growth in the past months. US consumer were willing to spend as labour market outlook was becoming more favorable. Additionally, housing sector registered better results with house prices rising, as reported earlier this week. All in all, better prospects of these above mentioned sectors could raise consumer sentiment.

Core Personal Consumption Expenditures (PCE) Price Index registered the same rate of increase in May 2013, compared to May 2012, 1.1%, as was during the preceding period. Projections also showed an annual increase by 1.1%. In monthly terms, the indicator rose by 0.1% in May, meeting expectations.

Market players had eased expectations that the Federal Reserve will start to unwind bond purchases by the end of this year, after a downward revision to US Q1 economic growth was announced on Wednesday. US Department of Commerce revised down first quarter GDP to 1.8% on annual basis from initially projected 2.4%.

Meanwhile, the number of unemployed people in Germany unexpectedly dropped for the first time in four months in June, while Unemployment rate remained stable. Official data pointed that unemployed were 12 000 less in June, while preliminary estimates stated their number would rise by 8 000. In May German Unemployment Change was revised down to an increase by 17 000 from 21 000 previously. In the mean time, Unemployment Rate stood at 6.8% in June, where it was a month ago. Estimates showed an increase to 6.9%.

The greenback rose to a fresh three-week high versus the sterling, with GBP/USD cross slipping 0.38% to 1.5254. The dollar widened its gains against the Swiss franc as well, with USD/CHF pair up by 0.34% to 0.9464. is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

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