U.S. Dollar Remains on Defensive

The dollar struggled at three month lows versus the euro early on Friday but encouraging news on the U.S. labor market helped it recover some ground against a host of other currencies.  Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell last week towards a 15-year low.

“After the disappointment of retail sales, it is some comfort that labor at least seems to be progressing well in Q2,” said Elsa Lignos, senior currency strategist at RBC.  “But it will take more than one slightly better jobless claims number to turn USD around.”

Indeed, the dollar stayed on the defensive against the euro and sterling, which climbed to three- and 5-1/2 month highs of $1.1445 EUR= and $1.5815 GBP=D4 respectively.  Both currencies were just off those peaks in early Asian trade.  That left the dollar index .DXY wallowing at four-month lows. The index is down 1.4 percent so far this week and has dropped more than 7 percent from a 12-year peak of 100.39 set in March.


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