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Dollar weakens in the wake of disappointing U.S. jobless claims

The greenback ticked down against its other major counterparts on Thursday, following the release of data revealing that U.S. jobless claims climbed to a four-week high last week and in anticipation of other U.S. economic releases later in the day.

Official statistics from the U.S. Department of Labor showed that initial jobless claims in the week ending February 27th, advanced by 6,000 to 278,000 from the previous week’s reading of 272,000. The median estimate expected the number of people filing for unemployment benefits to fall by 1,000 to 271,000 in the reported week. 

Another report released in the same day in the eurozone, revealed that retail sales increased by 0.4% last month, exceeding expectations for a 0.1% rise. On a year over year basis, retail sales in the eurozone increased 2.0% in the same month, above forecasts for a 1.3% rise and after increasing 2.1% in December. In the wake of these statistics, EUR/USD gained 0.33% to 1.0904.

However, the single currency remained under pressure, following ECB’s board member Benoit Coeure comments on Wednesday, stating that the European Central Bank will ease monetary measures later in March.  Benoit Coeure also argued that it was highly important to boost economic growth and stimulate inflation following the fall of prices to 0.2% in February. 

In the meantime, Markit said its services purchasing managers index in the U.K. fell to 52.7 in February from a figure of 55.6 a month before. This marked the lowest reading since March 2013. Economists forecasted the index to drop to 55.1 in February.
 
The greenback inched down against the sterling and the franc, with GBP/USD trading at 1.407889 and USD/CHF losing 0.32% to 0.9929, while rising against the Japanese yen, with USD/JPY up 0.30% to 113.81. 
 
Meanwhile, the Australian dollar was strengthened after the Australian Bureau of Statistics reported earlier in the day that the trade deficit narrowed to A$2.937 billion in January, compared to a downwardly revised reading of A$3.542 billion a month earlier. Analysts anticipated the trade deficit to narrow to A$3.100 billion in the reported month. 

The Aussie and the Kiwi remained supported, with AUD/USD gaining 0.60% at 0.7338 and NZD/USD advancing 0.45% to 0.6706. On the other hand, dollar was higher against the Canadian dollar by 0.19% to 1.3445.

The U.S dollar index fell 0.18% to 98.02, retreating from the previous session’s one-month high of 98.59.


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