The dollar held steady against the other major currencies on Thursday, after the release of upbeat U.S. employment data, as the minutes of the Federal Reserve’s most recent policy meeting limited the greenback’s gains and investors turned to Friday’s nonfarm payrolls report.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 2 decreased by 16,000 to 254,000 from the previous week’s revised total of 270,000. Analysts had expected jobless claims to rise by 2,000 to 270,000 last week.
The report came after U.S. Payroll processing firm ADP said non-farm private employment rose 172,000 last month, above forecasts for an increase of 159,000. The economy created 168,000 jobs in May, whose figure was upwardly revised from a previously reported increase of 173,000.
But the greenback’s gains were capped after the minutes of the Fed’s June policy meeting released on Wednesday showed that policymakers decided to keep interest rate hikes on hold as they assessed the Brexit impact.
GBP/USD gained 0.51% to 1.2996, off the previous session’s fresh 31-year lows of 1.2797.
The pound bouced back up after the U.K. Office for National Statistics said on Thursday that manufacturing production fell by 0.5% in May, better than expectations for a decline of 1.0%.
The report also showed that industrial production decreased by 0.5%, better than forecasts for a 1.0% decline.
The pound had dropped to fresh 31-year lows against the greenback on Wednesday, as Britain’s shock decision to leave the European Union continued to fuel uncertainty over the consequences of the U.K. vote on the country’s economy.
Investors were now looking ahead to the Bank of England’s policy meeting next week, after BoE Governor Mark Carney signaled last week that more stimulus may be needed over the summer, sparking expectations for an upcoming rate cut.
EUR/USD slipped 0.21% to 1.1075, while EUR/GBP dropped 0.72% to trade at 0.8521, off Wednesday’s a 35-month high of 0.8628.
The minutes of the European Central Bank’s last policy meeting released on Thursday showed that the Brexit vote could have significant negative repercussions for euro zone growth.
Policy makers also reiterated that the bank was ready to boost its stimulus program again if inflation remained below the near-2% target.
USD/JPY slid 0.22% to 101.10, while USD/CHF rose 0.24% to 0.9772.
Earlier Thursday, Bank of Japan Governor Haruhiko Kuroda said the central bank was ready to expand monetary stimulus further if needed to achieve its 2% inflation target and affirmed his confidence over Japan's recovery prospects, making no mention of the current Brexit turmoil.
The Australian dollar was lower, with AUD/USD down 0.17% at 0.75076, while NZD/USD rallied 1.18% to 0.7214.
Investors remained cautious with the Aussie after Standard and Poor's downgraded the outlook on Australia's AAA credit rating from stable to negative earlier Thursday.
Elsewhere, USD/CAD edged down 0.19% to trade at 1.2937. Statistics Canada reported on Thursday that building permits dropped 1.9% in May, compared to expectations for an increase of 2.0%. Building permits inched up 0.1% in April, whose figure was revised from a previously estimated 0.3% slip.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 96.18.