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08.06.202320:20:00UTC+00U.S. Dollar Moves Notably Lower On Jobless Claims Data

After turning in a relatively lackluster performance over the past few days, the value of the U.S. dollar has shown a notable move to the downside during trading on Thursday.

Currently, the U.S. dollar index is just off its worst levels of the day, down 0.77 points or 0.7 percent at 103.33.

The greenback is trading at 138.89 yen versus the 140.13 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0781 compared to yesterday's $1.0699.

The weakness in the dollar comes following the release of a Labor Department report showing a jump in weekly jobless claims, which helped ease concerns about the outlook for interest rates.

The Labor Department said initial jobless claims climbed to 261,000 in the week ended June 3rd, an increase of 28,000 from the previous week's revised level of 233,000.

Economists had expected jobless claims to inch up to 235,000 from the 232,000 originally reported for the previous week.

With the much bigger than expected advance, jobless claims reached their highest level since hitting 264,000 in the week ended October 30, 2021.

While economists noted jobless claims can be volatile around holidays like Memorial Day, the data seems to have added to optimism about the Federal Reserve pausing its interest rate hikes next week.

The Fed, which has previously warned about the impact of labor market tightness, is due to announce its latest monetary policy decision next Wednesday.

Key inflation reports are also likely to be in the spotlight next week, as the data could impact whether the Fed resumes its rate hikes next month.

CME Group's FedWatch Tool is currently indicating a 73.6 percent chance the Fed will leave rates unchanged next week but a 51.0 percent chance of another quarter point rate hike in July.



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