Dollar May Rise vs. EUR ahead of Jobless Claims

By IBTimes Staff Reporter | July 29 2010 9:26 AM

The US dollar softened against the euro and yen Thursday on concerns over the US economic outlook. Analysts are now saying that the US economy appears to be losing momentum, and this slow-down has been weighing on the American currency against its counterparts; especially the euro and British pound.

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The greenback declined vs. the Majors yesterday as a weaker-than-expected reading on new orders for US durable goods contributed more fears about the general economic outlook. Adding to the recent rise in risk aversion, the Federal Reserve has said that overall US economic activity is still increasing, but not as robustly as desired.

On the other hand, there is a chance that the US dollar may advance - after sliding 6.4% against the EUR this month - if the US economy shows signs of more modest growth. Several economists do not feel that the relative underperformance of American economic data will continue, and therefore we could see flows of investment back into the US, leading to dollar-appreciation.

Weekly jobless claims will again be a big event for the markets today, and market players may see the USD pare some of its previous losses and rise above the $1.2950 level if this report can beat forecasts.