By Joseph Adinolfi and Carla Mozee, MarketWatch

Greenback turns lower against yen

The U.S. dollar stretched gains against its main rivals into a third day, ahead of remarks from a host of Federal Reserve officials later Thursday as well as a widely watched report on April job gains due Friday.

The ICE U.S. dollar index , a measure of the dollar's strength against a basket of six rival currencies, picked up 0.4% to 93.5170.

The euro fell to $1.1432 in recent trade, from $1.1496 in late trade in New York. Meanwhile, the dollar was down slightly at Yen106.87, from Yen106.95 late Wednesday.

Though the number of people applying for unemployment benefits rose sharply last week, the total number of Americans collecting unemployment benefits fell (http://www.marketwatch.com/story/us-jobless-claims-climb-17000-to-274000-2016-05-05) in late April to a nearly 16-year low, which analysts said was supportive of the dollar because it increased the chances of a Fed interest-rate hike in June.

"The underlying trend in the labor market is still showing signs of improvement. If payrolls tomorrow comes in around 200,000, then I think a hike in June cannot be excluded," said Piotr Matys, emerging-markets currency strategist at Rabobank.

The dollar on Wednesday initially weakened after a report on private-sector employment came in at its weakest level in three years. But the currency soon shrugged off those declines to trade higher (http://www.marketwatch.com/story/dollar-advances-for-second-day-against-key-rivals-2016-05-04).

The presidents of four Fed regional banks were set to speak Thursday, with San Francisco Fed President John Williams appearing on CNBC, while St. Louis Fed President James Bullard slated to speak at the University of California, Santa Barbara at 11:50 a.m. Eastern.

Later in the day, Dallas Fed President Robert Kaplan and Atlanta Fed President Dennis Lockhart will join Bullard and Williams at a panel at Stanford University.

Comments from Bullard and Williams made late last week were decidedly hawkish, Matys said, which is also helping to boost the buck.

Investors will be watching for signs about the Fed's thinking for a June rate increase.

"It will be interesting to see where they all stand ahead of the June meeting which has currently been written off by the markets for the next rate hike," said Craig Erlam, senior market analyst at Oanda, in a note.

"We have seen some dollar strength in recent days although this doesn't appear to be a reflection of higher rate hike expectations, with Fed Funds futures implied odds still only being at 13% for June and the first hike still only seen in December," he wrote.

In other currency trading, the pound was down at $1.4511, compared with $1.4499 late Wednesday. Sterling fell after the Markit/CIPS purchasing managers index for the U.K. services industry showed activity slumped to a 38-month low in April, down to 52.3 from 53.7 in March.

"It is becoming increasingly clear that the elevated concerns over the immeasurable impact of a Brexit have taken their toll across the board with U.K. manufacturing, retail sales, and average earnings all entering a slippery decline," Lukman Otunuga, FXTM research analyst, said in a note.

Read:How London's mayoral election could help Brexit's opponents (http://www.marketwatch.com/story/londons-mayoral-election-threatens-a-setback-for-brexits-backers-2016-05-04)

 

(END) Dow Jones Newswires

May 05, 2016 09:56 ET (13:56 GMT)

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