Forex: U.S. Initial Jobless Claims Rose Less than Forecast Last Week; USD/JPY Strengthened
THE TAKEAWAY: [Initial jobless claims rise less than expected] > [Fewer applications for employment due to disruptions by Sandy] > [USDJPY strengthens]
The number of Americans applying for first-time claims for unemployment insurance payments came climbed less than expected. The Labor Department reported that applications for unemployment benefits rose to 370,000 last week, following an upwardly revision to 395,000 from 393,000 initially reported the week before. The median forecast of economists surveyed by Bloomberg News had called for a higher figure of 380,000.
Decline of applications in New Jersey and New York, the two states most affected by Superstorm Sandy last month indicates of significant disruption by the hurricane. Thus, the state data is reported with a one-week lag. In addition, the labor market is likely to remain struggling amid fear of fiscal cliff in U.S. and ongoing worries about the European debt crisis.
USDJPY 1-minute Chart: December 6, 2012
The U.S. dollar strengthened immediately after the release of the report. As can been seen from the one-minute chart above, USD/JPY pair rose to 82.37 yen from 82.35 yen, but soon returned to initial level before the release. At the time this report was written, the USD/JPY was trading at 82.32 yen.
--- Written by Renee Mu, DailyFX Research