Unexpectedly strong labor data from the U.S. helped to keep the U.S. Dollar supported versus the Japanese Yen. According to the U.S. Department of Labor, new claims for unemployment benefits fell to a level last seen in early 2006, news which could help investors gauge the Federal Reserve’s likely timing for an interest rate hike. Meanwhile, the Euro rebounded against the greenback moving away from a recently struck 8-month trough on supportive data from both Germany and France, which together are the economic drivers of the overall Eurozone economy.
As reported at 12:09 p.m. (JST) in Tokyo, the USD/JPY steadied at 101.79 Yen following last night’s 0.3% surge to 101.86 Yen, a 2-week peak. The EUR/USD recovered to $1.3464 after falling to $1.3438 though the pair is still poised to fall some 0.4% for the week. Data showed that business activity in France and Germany improved which helped to temper investors’ bearish views that the Eurozone could face fallout as a result of Russian sanctions that might otherwise precipitate additional easing by the European Central Bank.
U.K. GDP in Focus
In the U.K., markets will focus on upcoming GDP data for the second quarter which will also help investors assess the Bank of England’s future monetary policy. The BoE has been inconsistent in its bias over the past several weeks, and if the economy did grow to 3.1% (year-over-year) in the second quarter as analysts are predicting that could help alleviate some of the uncertainty. The GBP/USD was trading at $1.6990, recovering from a 1-month trough at $1.6967.