U.S. Jobless Claims Rose Less than Forecast Last Week; USD Slips
THE TAKEAWAY: [Initial jobless claims rise less than expected] > [Labor market to recover slowly amid global slowdown and pending U.S. fiscal policy changes] > [USDJPY weakens]
The number of Americans applying for first-time claims for unemployment insurance payments last week came in below expectations. The Labor Department reported that applications for unemployment benefits rose to 365,000 in the week ended July 28, following an upwardly revised figure of 357,000 new claims the week before. The median forecast of economists surveyed by Bloomberg had called for 370,000 applications.
The volatility in jobless claims figures should settle down after this week, as annual auto plant shutdowns that have made seasonal adjustments difficult, come to an end. Nonetheless, unemployment is likely to remain elevated as a slowdown in global economies and looming U.S. fiscal policy changes weigh on the labor market and keep employers reluctant to hire more workers.
USDJPY 1-minute Chart: August 2, 2012
Chart created using Market Scope – Prepared by Tzu-Wen Chen
After an initial spike following release of the jobless claims figures, the greenback dipped back against the Japanese yen. Movements in the currency markets were largely overshadowed by rhetoric from European Central Bank President Mario Draghi’s speech at the same time, following the ECB’s decision to hold its key interest rate unchanged. At this time this report was written, the USDJPY pair was trading at 78.12 yen.
--- Written by Tzu-Wen Chen, DailyFX Research
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