The US dollar traded modestly lower vs. most major currencies as continuing claims for unemployment benefits fell to a nine-month low, increasing demand for higher-yielding assets. Continuing jobless claims fell to 5,157,000 from revised claims of 5,460,000 the previous week. Initial jobless claims increased to 474,000, higher than forecasts at 455,000. The US trade deficit unexpectedly narrowed to $32.9 billion in October with help from the weaker dollar.
The euro was nearly unchanged against the dollar from yesterday's levels. Wholesale prices in Germany, Europe's largest economy, rose 0.7% last month month-over-month, compared to a 0.4% decline the previously. The increase is adding to evidence that the economic recovery in Germany is slowly taking hold, a positive sign for the Euro Zone.
Sterling stayed steady against the dollar after the Bank of England kept its asset-buying program unchanged at GBP 200 billion and left interest rates at 0.5%.
The Japanese yen weakened against the dollar after figures from US continuing jobless claims fell. Japan's core machinery orders fell 4.5% in October, the first decline in three months.
The Canadian dollar extended overnight gains after positive domestic data. Statistics Canada reported a trade surplus in October that totaled C$428 million after three months of deficits. The trade surplus is credited to rising exports to the US and gold and energy prices' continual rise.
The Australian dollar rebounded, spurred by an impressive jobs report from Australia. Data showed Australia added a higher than forecast 31,200 jobs in November, and unemployment unexpectedly fell to 5.7%. This was enough to convince investors the Reserve Bank of Australia will likely raise interest rates by another 25 basis points at its next policy meeting in February.
The New Zealand dollar hit a one week high after the country's central bank opened the door to rate rises as early as April. Reserve Bank of New Zealand said it may start withdrawing monetary stimulus by the middle of 2010 as local and global economic outlook improve. Analysts are beginning to speculate that RBNZ may raise interest rates by 25 basis points in March.
10-Year Treasury Note Yield: 3.4835%
Dow Jones Industrial Average: 10,407.04 +69.99
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