The US dollar rose against the euro and yen after initial jobless applications declined by 6,000 to 439,000 in the week ended March 27, bringing the average over the past month to the lowest level since 2008.The data boosted demand for US assets as the recovery strengthens. The greenback also climbed against the euro and yen after data showed US manufacturing expanded in March at its fastest pace in more than five years. The market now eagerly awaits tomorrow's payroll report which should show US employers added jobs in March.

The euro slipped against the US dollar after positive data showing US manufacturing expanded in March and a decline in US initial jobless claims. The single currency is still, however, heavily pressured as Europe's week-old rescue plan for Greece has so far failed to do what its leaders predicted: reduce borrowing costs for the region's most indebted country.

The British pound hit a five-week high versus the euro extending the previous day's gains as the chances of a hung parliament begin to decrease. An opinion poll showed the opposition Conservatives could gain a majority in the upcoming election, diminishing UK political uncertainty. Analysts, however, warned structural issues in the UK economy could hamper investor confidence towards the pound in the longer term.

The Japanese yen hit a seven-month low against the US dollar as Japanese investors rang in Japan's fiscal New Year by moving funds abroad into higher-yielding currencies and assets. The greenback also pushed higher against the yen to the highest since August before a government report tomorrow that economists say will show US employers added jobs in March. The expectation that a pick-up in Japanese investor demand for foreign currencies, higher risk appetite, expectations US Treasury yields will rise, and widening rate differentials over Japanese government bonds will weigh further on the yen.

The Canadian dollar advanced for a fourth day versus its US counterpart and strengthened against 14 of its 16 most traded counterparts, the longest streak in two weeks, as gains in stocks and commodities prompted demand for currencies tied to growth. Canada's dollar rose yesterday after a report showed the nation's economy grew in January at the fastest pace in three years.

The Australian dollar was holding firm as an upbeat report on Chinese manufacturing helped offset a widening in Australia's trade deficit, helping boost risk appetite and commodity prices. The Australian dollar also posted its biggest daily rise in a month against the New Zealand dollar after the International Monetary Fund said it thought the kiwi dollar was over-valued by as much as a quarter. The International Monetary Fund said the currency was overvalued and the government needed to do more to cut costs and shrink debt.

Indicative rates:

EUR/USD

1.3587

USD/JPY

93.54

GBP/USD

1.5303

USD/CAD

1.0070

USD/MXN

12.2997

USD/CHF

1.0510

AUD/USD

0.9218

NZD/USD

0.7111

10-Year Treasury Note Yield: 3.872%

Dow Jones Industrial Average: 10,930.47 + 73.99