The U.S. Dollar erased losses against the Yen following the release of positive economic fundamentals which showed that U.S. unemployment benefit claims increased less than anticipated, while the manufacturing index went up.
Solid Data Boosts Dollar
The U.S. Dollar rallied against several Forex market majors as economic releases showed that the number of individuals who filed for unemployment benefits for the first time went up by 2,000 up to 304,000, coming in lower than the predicted 315,000. Other announcements issued by the Federal Reserve Bank of Philadelphia indicated that the gauge which measures activities in the manufacturing sector climbed to 16.6 this month, the highest since last September, and above the 9.0 reading from March. The greenback had weakened on Wednesday as Fed Chairperson Janet Yellen reiterated that monetary policy would remain accommodative while the employment sector recovers and inflation increases. The greenback rallied versus the Yen as the governor of the Bank of Japan, Haruhiko Kuroda, stated that now was not the appropriate time to expand on monetary easing.
Canada Follows U.S. Lead
Canada followed the U.S. by reporting solid economic calendar fundamentals indicating that the yearly rate of consumer inflation went up to 1.5 percent in March, after posting at 1.1 percent in February. The reports showed that the hike occurred as a result of the higher costs of energy and tobacco products. Furthermore, the release denoted that on a month over month basis, consumer prices rose 0.6 percent, instead of the expected 0.3 percent. The Loonie plummeted versus the greenback on Wednesday when the Bank of Canada announced it was leaving the interest rate at the current 1.0 percent and suggested that monetary policy changes would come about depending on the state of the economy. According to central bank governor Stephen Poloz, the hike in inflation may be temporary as the current trends remain “subdued.”
Sterling Continues To Strengthen
The British Pound extended gains versus the Euro after reaching the highest rate in a month-an-a-half, days after the U.K. reported that the unemployment rate fell to 6.9 percent from December through to February; and it has remained strong since the International Monetary Fund indicated that the British economy could sustain 2.9 percent growth this year. Economists have indicated that in order for the economy to remain supported, there will have to be a higher level of investments and demand from abroad. The British currency has advanced 5.2 percent in the past half a year on speculation that the Bank of England could boost the key cash rate.