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USD Slides After Last Week's Initial Jobless Claims Rose Less Than Expected

USD Slides After Last Week's Initial Jobless Claims Rose Less Than Expected

Tzu-Wen Chen, Technical Strategist

THE TAKEAWAY: Initial Jobless Claims rose less than expected last week > Employers remain cautious amid concerns of fiscal cliff and global slowdown > USDJPY bearish

The number of Americans filing first-time claims for unemployment insurance payments climbed less than expected last week, though the labor market remains lackluster. The Labor Department reported that applications for unemployment benefits rose to 367,000 last week, slightly better than the median forecast of 370,000 according to a Bloomberg News survey. Meanwhile, the prior week’s reading for jobless claims remains at a two-month low, despite an upward revision to 363,000 from 359,000 initially reported.

The labor market has struggled to gain traction, as employers remain reluctant to hire more workers amid concerns about the impending fiscal U.S. fiscal policy changes of higher taxes and government spending cuts, and ongoing worries about the European debt crisis and slowing global growth.

At the same time, the Labor Department reported worse-than-expected continuing jobless claims, with the number of Americans receiving benefits holding steady at 3.28 million in the week ended September 22.

USDJPY 1-minute Chart: October 4, 2012

USD_Slides_After_Last_Weeks_Initial_Jobless_Claims_Rose_Less_Than_Expected_body_Picture_2.png, USD Slides After Last Week's Initial Jobless Claims Rose Less Than Expected

Chart created using Market Scope – Prepared by Tzu-Wen Chen

Immediately after the data release, the U.S. dollar fell against the Japanese yen to as low as 78.53 yen from its pre-release level of 78.64 yen. At the time this report was written, the USDJPY pair continued to trade lower at 78.54 yen.

--- Written by Tzu-Wen Chen, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.