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Upbeat Economic Data Fails To Rescue Dollar, EUR/USD Nears 3-Year High

1/5/2018, 11:10:24 AMBasics of Trading
Upbeat Economic Data Fails To Rescue Dollar, EUR/USD Nears 3-Year High

The dollar continued to languish at there-month lows on Thursday as an upbeat labor market report failed spark a rebound in the greenback amid pressure from a rally in the euro to nearly three-year highs.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.24% to 91.67.

The dollar gave up most of its gains from Wednesday’s session as the prospect of the Fed adopting a more aggressive path to monetary policy tightening amid upbeat economic data did little to lift sentiment on the greenback.

Private payrolls grew by 250,000 for December, a sharp increase from the 185,000 private jobs created in the previous month, according to a report released Wednesday by ADP and Moody's Analytics. That beat economists’ forecast of 191,000.

The U.S. Department of Labor reported Thursday that initial jobless claims increased 5,000 to a seasonally adjusted 250,000 for the week ended Dec. 30, missing forecasts of a 3,000 increase.

Analysts at Pantheon, however, noted that the rise in weekly jobless claims – the result of holiday season problems – were “nothing to worry about,” as weakness is expected to “reverse in due course.”

A sharp rally in the euro added to pressure on the greenback as the single currency neared three-year highs on upbeat Eurozone service sector, which stoked expectations that the European Central Bank is considering reining in its loose monetary policy measures.

EUR/USD rose 0.42% to $1.2073 while EUR/GBP rose 0.24% to £0.8911.

GBP/USD rose 0.23% to $1.3546 but remained below $1.36 resistance.

USD/JPY gained 0.28% to 112.79, while USD/CAD fell 0.26% to C$1.2506 as the latter came under pressure amid rally in oil prices