The US Dollar has weakened against the majority of its major peers as economists await the release of data that is expected to show that the number of Americans claiming jobless benefits increased and as a number of indicators rose at a slower pace than expected.
According to economists the US labour department is expected to show that applications for unemployment benefits in the USA increased to 350,000 in the week ending April 13th, a rise of 4,000 from the previous week. The Conference Boards expectation for the latest USD leading indicators for the next six months is also expected to climb less than expected.
Against Pound Sterling the ‘Greenback’ has strengthened after British retail sales data showed that sales had increased year on year by 0.4% a figure less than economists expected. When the data measured by year by year included fuel sales the scale came in below the estimated figure of -0.2% to -0.5%. The previous month the data had been positive coming in at 2.5%. On a month by month basis retail sales declined by -0.8%.
The Pound was already weakened by yesterday’s data that showed that unemployment had increased and wage rises were at their slowest pace since 2001.
“It’s the earnings data that has done the damage. Combined with CPI data yesterday it shows the brutal squeeze on real incomes is ongoing,” said Adam Cole, global head of FX strategy at RBC Capital Markets.
If the jobless data shows a worse than expected rise in the number of jobless claims we can expect the Dollar to strengthen as investors seek shelter in a safe haven currency. The data is also likely to have a negative impact on the Canadian Dollar and other currencies. The Yen may strengthen.
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