U.S. Dollar Firms on Positive Labor Data

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The U.S. dollar advanced in late trading on Wednesday, following economic data indicating a larger-than-anticipated drop in the number of Americans filing new claims for unemployment benefits last week.

The dollar index, which measures the greenback against six major peers, was up 0.34 percent to 103.9241 in late trading, rebounding from a two-and-half-month low.

The U.S. Labor Department reported Wednesday that jobless claims dropped by 24,000 to 209,000, the lowest level in more than a month. Overall, 1.84 million Americans were receiving unemployment benefits as of the week ending Nov. 11, down by 22,000 from the week before.

“Job growth remains strong, the unemployment rate remains historically low, and businesses have yet to start reducing their workforce in a significant way,” said Rubeela Farooqi, chief U.S. economist at the High Frequency Economics. “We expect some softening in labor demand going forward as the effects of restrictive monetary policy spread more broadly through the economy.”

Durable goods orders in the United States declined by 5.4 percent, or 16 billion U.S. dollars, to 279.4 billion dollars in October, the Census Bureau reported on Wednesday. However, the U.S. dollar showed little reaction to this report.

Meanwhile, the U.S. consumer sentiment fell for a fourth consecutive month in November, according to the final report for the Michigan Consumer Sentiment Index on Wednesday. The index came in at 61.3, down 2.5 points (-3.9 percent) from the October final. The report also showed the U.S. consumers’ inflation expectations rose for a second straight month in November.

In the eurozone, European Central Bank (ECB) policymaker Mario Centeno anticipated that the prevailing macroeconomic conditions would prompt a shift in the central bank’s recent pattern of raising interest rates soon, while the ECB governing council member Joachim Nagel indicated that interest rates in the eurozone were nearing the highest point in the current cycle, if not already there.

In late New York trading, the euro was down to 1.0884 dollars from 1.0915 dollars in the previous session.

The British pound was down to 1.2490 dollars from 1.2540 dollars in the previous session, after British finance minister Jeremy Hunt announced tax cuts for workers before an expected 2024 election and gave businesses permanent investment incentives in an attempt to speed up the economy.

The U.S. dollar bought 149.5760 Japanese yen, higher than 148.3330 Japanese yen of the previous session. The U.S. dollar was up to 0.8841 Swiss francs from 0.8838 Swiss francs, and it increased to 1.3702 Canadian dollars from 1.3699 Canadian dollars. The U.S. dollar was up to 10.4890 Swedish kronor from 10.4590 Swedish kronor. 

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