Dollar Surges As US Jobless Claims Drop More-Than-Expected
THE TAKEAWAY: [U.S. Initial Jobless Claims fell more than expected to 339K; Continuing Claims decreased to 3000K] > [Claims data typically bounce around this time of year as the period of unwinding swings close to an end] > [USDJPY Bullish]
Applications for unemployment insurance payments fell more than expected in the week ended April 20, the lowest level since March 9. According to a report issued by Labor Department in Washington today, jobless claims dropped by 16,000 last week to 339,000 unexpectedly, while the initial claims from two week ago were upwardly revised to 355,000 from 352,000 initially reported. Economists polled by Bloomberg News had forecasted a drop to 350,000. At the same time, the continuing claims declined to 3,000,000, better than the consensus forecast of 3,060,000.
A Labor Department spokesman said that big swings in claims are common this month as Easter holidays and spring breaks at school fall on different weeks from year to year. He also said that the period of swings in unadjusted data should be coming to an end. Today’s report indicates that companies are trying to maintain current hiring level. Overall, the labor market has “a moderate improvement” over the past six months or so according to Fed’s Dudley. Concerns remain on the Federal budget cuts which will trim 5 percent from domestic agencies and 8 percent for Defense Department this fiscal year.
USDJPY 1-minute Chart: April 25, 2013
Chart created using Marketscope 2.0– Prepared by Renee Mu
The better-than-expected Jobless Claim report sent the US dollar higher against all counterparts. In particular, the USD/JPY rallied by 13 bps to 99.21 yen following the release. At the time of this report written, the currency pair was trading at 99.17 yen.
--- Written by Renee Mu DailyFX Research