Dollar Rebounds As Jobless Claims Decline, Fed's Lockhart Hints At Rate Hike
March 26 2015 - 9:51AM
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The U.S. dollar trimmed its early decline against its major
counterparts in New York deals on Thursday, following a report
showing that initial jobless claims pulled back more than expected
in the week ended March 21st.
Atlanta Federal Reserve Bank President Dennis Lockhart said that
Fed is likely to raise rates by mid year or even later, as the
economy is performing in a mixed manner.
"We are coming to a point where we are seriously going to look
at a decision to raise rates," he told in an interview with
CNBC.
The Labor Department report showed that initial jobless claims
fell to 282,000, a decrease of 9,000 from the previous week's
unrevised level of 291,000. Economists had expected jobless claims
to edge down to 290,000
The dollar that had been seen a relentless slide in the
aftermath of yesterday's weak durable goods orders data got some
relief after jobless claims.
Traders now await third estimate of U.S. GDP data for the fourth
quarter and consumer sentiment index, due tomorrow, for further
clues about the economy's strength.
The Commerce Department report may show that the economy
expanded 2.4 percent in the final three months of 2014, up from its
previous estimate of 2.2 percent.
Survey by the Reuters/University of Michigan may show the U.S.
consumer sentiment rising by 92.0 in March, from previous reading
of 91.2.
Federal Reserve Bank of St. Louis President James Bullard said
the change in guidance by dropping the term patient by the Fed
"should be interpreted as a sign of strength for the U.S.
economy."
While speaking in Frankfurt, Bullard said the it is appropriate
for the central bank to begin normalizing monetary policy now, as
keeping rates low for long period raise risk of asset bubbles.
"Even with some normalization, policy will remain exceptionally
accommodative," he added.
The greenback, which fell to a weekly low of 1.4993 against the
pound at 5:30 am ET, recovered to 1.4881. The greenback may
possibly challenge resistance around the 1.48 zone.
British retail sales growth accelerated more than expected in
February, data from the Office for National Statistics showed.
Retail sales volume increased at a faster pace of 0.7 percent in
February from January, when it gained 0.1 percent.
After falling to a 3-week low of 1.1051 against the European
currency in European morning deals, the greenback changed course
with pair trading at 1.0960. Next possible resistance for the
greenback may be located around the 1.05 region.
German consumer confidence is set to improve in April, survey
data from the market research group GfK showed.
The forward-looking consumer sentiment index rose to 10 in April
from 9.7 points in March. The index was expected to rise marginally
to 9.8.
The greenback edged up to 119.08 against the yen and 0.9568
against the franc, coming off from early near 5-week low of 118.32
and near 4-week low of 0.9490, respectively. If the greenback rises
further, 120.00 and 0.966 are likely seen as its next resistance
levels against the yen and the franc.
Looking ahead, Swiss National Bank member Fritz Zurbrugg will
deliver a speech about monetary policy after the cap at the Money
Market Event, in Zurich at 1:00 pm ET. Half-an-hour later, Bank of
England Governor Mark Carney will hold a press conference about his
role as Chair of the Financial Stability Board, in Frankfurt.
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