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    Dollar trims losses on positive U.S. employment data

    The dollar trimmed losses against the other major currencies on Thursday, after data showed that U.S. non-farm private employment rose in line with expectations in May and that U.S. jobless claims fell unexpectedly last week.

    USD/JPY was down 0.55% at a two-and-a-half week low of 108.95.

    Payroll processing firm ADP said non-farm private employment rose by 173,000 last month, just below expectations for an increase of 175,000.

    The economy created 166,000 jobs in April, whose figure was upwardly revised from a previously reported increase of 156,000.

    Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 28 decreased by 1,000 to 267,000 from the previous week’s total of 268,000.

    Analysts had expected jobless claims to rise by 2,000 to 270,000 last week.

    But the yen remained supported after Japanese Prime Minister Shinzo Abe said Tuesday he was planning to delay a scheduled sales tax hike amid ongoing weakness in the economy. He also announced plans to implement a fiscal stimulus package later this year.

    The announcement raised speculation over a shift away from monetary easing by the Bank of Japan as a way to spur growth.

    EUR/USD was little changed at 1.1191, off highs of 1.1220 hit earlier in the session.

    The European Central Bank said it was maintaining its benchmark interest rate at a record-low 0.0%, in line with market expectations.

    ECB President Mario Draghi was set to hold a press conference shortly after the decision.

    The dollar was lower against the pound, with GBP/USD up 0.24% at 1.4447, while USD/CHF held steady at 0.9885.

    The pound’s gains were capped however, as the Markit U.K. construction purchasing managers' index fell to 51.2 from April’s reading of 52.0. Economists had expected an unchanged reading.

    The report said that delay’s to client decision making ahead of the European Union membership referendum on June 23 had contributed to the slowdown.

    The Australian and New Zealand dollars were weaker, with AUD/USD down 0.69% at 0.7207 and with NZD/USD sliding 0.45% to 0.6787.

    The Australian Bureau of Statistics reported on Thursday that retail sales rose by 0.2% in April, disappointing expectations for a 0.3% gain, after an increase of 0.4% the previous month.

    A separate report showed that Australia’s trade deficit narrowed to A$1.58 billion in April from A$1.97 billion in March. Analysts had expected the trade deficit to widen to A$2.00 billion in April.

    Elsewhere, USD/CAD rose 0.29% to trade at 1.3112.

    The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.33, off lows of 95.15 hit earlier in the day.

     


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