An unexpected increase in the weekly jobs claims data from the US Labor Department helped to put the greenback on the defensive. On Wednesday, the Federal Reserve had noted that the jobs recovery was beginning to slow, which raised concerns that the US economy would be able to recover from the fallout of the Coronavirus. Thursday's data essentially cemented the worrying outlook. According to the Labor Department, initial claims for unemployment benefits surged to above 1.1 million for the week ended August 14th. Continuing claims was slightly less than had been expected at 14.844 million, with forecasts at 15 million. Also weighing on dollar sentiment was the Philadelphia Fed Manufacturing Survey for August which had a reading of 17.2, far worse than the 21 expected.
As of 10:13 am in Tokyo, the EUR/USD was trading higher at $1.1869, up 0.0717% and off the session peak of $1.18772. The GBP/USD was also higher at $1.3225, a gain of 0.0848%; the pair has ranged from a low of $1.32058 to a high of $1.32357.
Eurozone PMIs Eyed
Later today, market players will be awaiting the latest info from Markit Surveys. Preliminary PMI readings for the Manufacturing and Services sectors for Germany are expected to come in with readings of 52.5 (up from 51) and 55.1 (down from 55.6), respectively; the composite survey is expected at 55.0, sliding from the previous reading of 55.3. Similarly, France's PMIs are expected to be mixed with the manufacturing sector showing improvement and the services sector showing a contraction. The Eurozone composite surveys are likely to follow the same trend. Later in the day, Markit Survey PMIs for the US market are also due out, with economists expecting to see a slight improvement in both important sectors; both are likely to remain just above the 50.0 threshold which separates a contracting sector from an expanding one.