Dollar gains as initial claims fall to 409,000

British pound – The British pound spent most of the morning in positive form in response to a firm retail sales report for April. Sales were ahead of expectation rising 1.2% on the month to stand 2.8% ahead on a year-ago basis. March data firmed in the accompanying revision to today’s report. The pound rose to a little above $1.6200 aided by a weaker dollar. In the bigger picture the pound’s gains remain suspiciously devoted to aspirations of what I predict will be an unlikely move on monetary policy from the Bank of England. The unit turned back to negative territory following U.S. data and remained on an even keel per euro at 88.06 pence.

Euro – The single currency also attempted a rally on data-free Thursday but was pushed back once stops were satisfied above $1.4300. Any solution to peripheral woes remains elusive following the ECB’s rebuttal of political theories suggesting debt restructuring for Greece. And as much as the market clings to this as a potential work around, investors might regret being long of the currency if and when that maelstrom touches down. Such fears lingering on the horizon seem to be cramping any meaningful euro currency recovery and explain dealers’ preparedness to continue testing the downside as U.S. data competes for the economic headlines. The euro traded recently and ahead of existing U.S. home sales data at $1.4262 after rebounding from $1.4206.

Aussie dollar – The buoyant tone to commodities and equities early had the growth-sensitive crowd rallying with vigor against the greenback. However, it was again the initial claims data and rising treasury yields that played right into the American unit’s hands forcing the Aussie in particular to retreat back towards the start line. The Aussie’s best point of the day was late in the Asian session when it touched $1.0681 U.S. cents. It eased in European trading as dealers digested a slowdown in weekly wage data. Aussie weekly wage growth numbers cooled to a 3.8% year-on-year pace through February and will be welcomed by the RBA as a sign that broadly rising inflation isn’t taking a hold in the tightening labor market. The unit eased as the dollar fought back and the pair last traded at $1.0647.

Canadian dollar – The Canadian unit is trying hard to hold on to an earlier commodity-rebound induced gain against the dollar. Friday brings inflation and retail sales reports giving Bank Governor Carney additional ammunition at a forthcoming address. The unit earlier fetched $1.0347 U.S. cents before struggling falling to $1.0321.

Andrew Wilkinson is a Senior Market Analyst at Interactive Brokers LLC

Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

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About the Author
Andrew Wilkinson

Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.

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