Forex News – Dollar gains after U.S. jobless claims drop to lowest in four years

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Dollar extended gains against the euro after U.S. jobless claims data. The number of claims filed by Americans for initial jobless benefits fell more than expected last week, marking the lowest level in four years.

A report from the U.S. Labour Department showed that jobless claims fell by 26,000 last week to 350,000. The figure was well below expectations of 372,000. The sharp decline was likely driven by fewer auto-sector lay offs than normal.

Meanwhile, continuing  jobless claims dropped by 14,000 to a seasonally adjusted 3.3 million in the week ended June 30.

EURUSD fell to 1.2166 from 1.2186 immediately after the data at 7:30 New York time before recovering slightly.

USDCHF jumped to 0.9868 from 0.9851. The dollar is trading at a 1-1/2 year high against the Swiss franc today.

The U.S. Dollar has been strengthening since yesterday following the FOMC minutes released that signalled the Fed is unlikely to further ease policy this year. Thus, no QE3 helped buoy the greenback.