Dollar pares losses as US jobless claims fall more than forecast

Dollar pares losses as US jobless claims fall more than forecastThe dollar pared some of its earlier losses against a basket of major currencies on Thursday after a report showing U.S. jobless claims fell more than forecasts last week.

The number of Americans asking for first-time unemployment benefits dropped to 276,000 in the week ended May 30 from an upwardly revised of 284,000. Analysts had predicted the claims to drop to 280,000.

Jobless claims remained for a 13th straight week below the 300,000 threshold, indicating the progress in the labor market.

Continuing claims also plunged 30,000 to 2.20 million in the week through May 23, marking lowest since November 2000.

Private sector employers added more than forecast jobs in May, the ADP employment report signaled on Thursday, yet the main attention will be on tomorrow’s NFP, which is deemed by the investors the real gauge for the conditions of the jobs market.

American employers added 225,000 jobs in May, the non-farm payrolls report may show.

The dollar has become under pressure since the beginning of the week as many traders opted to close their long positions until seeing the NFP figures.

A better than estimated job gain record on Friday is likely to help the dollar recover its losses and may resume its bullish direction after taking a break in April.

The dollar index managed to rebound from a low of 94.66 to hover around 95.30, yet it still may face resistance at SMA 20 level located at 95.53.

The RSI 14 momentum indicator is moving below the 50-center line, indicating momentum is not strong enough to help the dollar to rise further.

dollar pares losses after US jobless claims

Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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