The greenback extended its rally after a weekly jobless claims report showed the US labor market is still robust, adding evidence to the view that the Fed need not cut rate anytime soon. The weekly dropped 5000 to 293k, beating the estimate of 310k. The euro fell off the 1.35 handle against the dollar and reached as low as 1.3478. The sterling slid from 1.9790 to 1.9734 versus the dollar following the upbeat US job data.
Later in the day, the market was little changed after two other US reports. Leading indicators unexpectedly declined 0.5% in April, compared with a 0.1% rise in the previous month. Philadelphia Fed index rose from 0.2 to 4.2 in May, beating the estimate of 3.0.
Technically, the euro is supported at 1.3460 versus the dollar. Should the pair broke this level, the next target will be 1.3350.
The market will focus on the University of Michigan consumer sentiment (exp 86.5, prev 87.1) due 10:00 AM EST Friday.
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