Forex, the dollar rises with lower US jobless claims, interest rate hike bets from Reuters

Forex, the dollar rises with lower US jobless claims, interest rate hike bets from Reuters
© Reuters. US dollar banknotes. March 10, 2023. (Reuters) / Dado Rovic / illustration / file photo

NEW YORK (Reuters) – The dollar rose against a basket of currencies after data showed that the number of new jobless claims in the United States fell unexpectedly last week, boosting expectations that the Federal Reserve may continue its interest rate hike cycle if the economy remains strong.

State initial jobless claims totaled 228,000 for the week ending July 15, down 9,000 (seasonally adjusted), according to the Labor Department. Last week, opinion polls expected 242,000 inquiries.

The odds of the Fed continuing its rate hike cycle after an expected 25 basis point hike next week have increased on the back of the data. Fed fund futures traders are pricing in another 34 basis points of tightening, versus yesterday’s forecast for a 32 basis point rise.

The dollar lost ground after data on consumer and producer prices last week indicated that inflationary pressures may be closer to reaching the 2% target set by the Fed.

At around 17.00, the dollar index rose 0.52% against a basket of currencies, to settle at 100.805. The euro fell 0.15% to $1.1142.

The pound continues to slide after British inflation data yesterday indicated a trend rate of 7.9%, its lowest level in more than a year, easing pressure on the Bank of England to continue raising interest rates.

The British currency fell 0.48% to $1.285, down from $1.3144 on Thursday, the highest level since April 2022.

The dollar advanced 0.09% against the Japanese yen, to 140.28.

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(Translated by Camilla Puri, Editing by Antonella Cinelli)

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