NEW YORK/LONDON: The dollar slipped from a one-year high on Thursday in choppy trading, pressured a little bit by a rise in US weekly jobless claims, and as investors consolidated gains after a steep rise the last few sessions.
The greenback overall has been supported by the spike in US Treasury yields amid expectations the Federal Reserve will taper its monetary stimulus beginning in November even as global growth slows.
Thursday’s economic data, though, dented some of the dollar’s strength.
US initial jobless claims rose for a third straight week to 362,000 for the period ending Sept. 25, data showed. Economists polled by Reuters had forecast 335,000 jobless applications for the latest week. That said, another report confirmed that US economic growth accelerated in the second quarter, at a 6.7% clip, thanks to pandemic relief money from the government, which boosted consumer spending. The dollar index, which measures the currency against a basket of six rivals, hit 94.504, its highest since Sept. 28 last year. It was last down slightly at 94.287.
“The dollar’s surge that lifted it to new highs for the year yesterday against the euro, yen, and sterling, has eased today and a consolidative tone is evident,” wrote Marc Chandler, chief market strategist at Bannockburn Forex, in a research note.
The dollar’s recent gains came despite a political standoff in Washington over the US debt ceiling that threatens to shut down much of the government. Yields on the benchmark 10-year Treasury note stood at 1.541%, holding near a three-month high reached Tuesday at 1.5670%.
The dollar hit 112.07 yen, the highest since February 2020. It was last down 0.2% at 111.815 yen, but on track for its best monthly performance since February.
The euro was down at $1.1585, after earlier hitting $1.1568,its lowest since July 2020. The risk-sensitive Australian dollar firmed 0.7% to US$0.7221, after plummeting 0.9% overnight, as iron ore prices rallied ahead of the Golden Week holiday in Australia’s top trading destination China.
A slight improvement in overall risk sentiment after days of gloom was seen in the cryptocurrency markets, as bitcoin rose 3.8% to $43,142 and ether bounced 4.5% to $2,979. Both coins are down between 20% and 27% from their September peaks.