Dollar Weakening After Jobless Claims & New Home Sales Disappoint

13:51, 23rd April 2015

(RTTNews) - The dollar is losing ground against all of its major competitors Thursday, following the release of a pair of disappointing economic reports. Weekly jobless claims logged an unexpected increase, while new home sales came in weaker than anticipated. Investor optimism for a resolution to the situation in Greece is further fueling the Euro.

First-time claims for U.S. unemployment benefits unexpectedly saw a modest increase in the week ended April 18th, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims edged up to 295,000, an increase of 1,000 from the previous week's unrevised level of 294,000. The modest uptick came as a surprise to economists, who had expected jobless claims to dip to 290,000.

After reporting a notable increase in U.S. new home sales in the previous month, the Commerce Department released a report on Thursday showing that new home sales pulled back by much more than expected in the month of March.

The report said new home sales plunged 11.4 percent to an annual rate of 481,000 in March after jumping 5.6 percent to a revised rate of 543,000 in February. Economists had expected new home sales to drop to an annual rate of 518,000 from the 539,000 originally reported for the previous month.

Eurozone finance ministers are scheduled to hold a meeting in Latvia on Friday to discuss Greece. Investors are optimistic that a deal will soon be reached and that Greece will remain in the Eurozone.

The dollar rose to an early high of $1.0662 against the Euro Thursday morning, but has dropped to a 4-session low of $1.0840 this afternoon.

Eurozone private sector growth pulled back from March's 11-month high in April as concerns over Greece crisis started to weigh on economic activity despite the boost from the European Central Bank's quantitative easing. The flash composite output index fell unexpectedly to 53.5 in April from 54 in March, according to the purchasing managers' survey results published by Markit Economics. The expected score was 54.4.

Germany's private sector growth moderated at the start of the second quarter, survey data from Markit Economics showed Thursday. The flash composite output index fell to 54.2 in April from an eight-month high of 55.4 in March. The latest index reading was still the second-strongest since last September.

The French private sector growth weakened to near stagnation in April as manufacturing continued to shrink, flash survey data from Markit showed Thursday. The flash composite output index fell to 50.2 in April, a 3-month low, from 51.5 in March, signaling a fractional increase in output.

Germany's consumer confidence is set to rise further to the strongest level since October 2001, survey data from the market research group GfK showed Thursday. The forward-looking consumer climate index rose to 10.1 points in May from 10 in April. This was its highest value since October 2001, when the indicator was at 11.0 points.

French manufacturing confidence improved more than expected in April to the highest level since August 2011, survey data from the statistical office Insee showed Thursday. The manufacturing confidence index rose to 101 in April from 99 in March. It was expected to rise to 100. This was the highest score since August 2011.

The buck climbed to an early high of $1.4947 against the pound sterling Thursday, but has pulled back to around $1.5060 this afternoon.

U.K. retail sales declined for the first time in six months in March on petrol sales, casting doubt over economic growth gaining strength at the start of the year. Retail sales including auto fuel unexpectedly dropped 0.5 percent on a monthly basis in March, reversing a 0.6 percent rise in February, data from the Office for National Statistics showed Thursday.

This was the first fall in six months and the biggest since January 2014. Economists had forecast a 0.4 percent rise for March.

Another report from the ONS showed that public sector net borrowing excluding interventions decreased by GBP 0.4 billion to GBP 7.4 billion in March. The expected level was GBP 7 billion.

Gross mortgage lending in the United Kingdom increased notably in March, data from the Council of Mortgage Lenders, or CML, showed Thursday. Total mortgage lending grew 21.0 percent in March from the previous month to EUR 16.5 billion. On an annual basis, lending increased by 7.0 percent.

The greenback rose to an early high of Y120.092 against the Japanese Yen Thursday, but has fallen to Y119.550 this afternoon.