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Dollar Losing Ground After Jobless Claims Disappoint

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The dollar is down against all of its major rivals Thursday afternoon. While concerns over the U.S. bond market have eased after China dismissed a Bloomberg News report that officials have recommended slowing or halting purchases of U.S. debt, traders were disappointed by today's weekly jobless claims data. The minutes from the most recent ECB meeting also triggered a jump in the value of the Euro.

For the second consecutive week, the Labor Department released a report on Thursday showing an unexpected increase in first-time claims for U.S. unemployment benefits. The report said initial jobless claims climbed to 261,000 in the week ended January 6th, an increase of 11,000 from the previous week's unrevised level of 250,000.

The modest increase came as a surprise to economists, who had expected initial jobless claims to edge down to 245,000.

A report released by the Labor Department on Thursday unexpectedly showed a modest decrease in producer prices in the month of December.

The Labor Department said its producer price index for final demand edged down by 0.1 percent in December after climbing by 0.4 percent in November. Economists had expected prices to rise by 0.2 percent.

The European Central Bank could change the tone of its monetary policy communication early this year to reflect the improvement in growth prospects, minutes of the latest policy session showed on Thursday.

"Looking ahead, the view was widely shared among members that the Governing Council's communication would need to evolve gradually, without a change in sequencing, if the economy continued to expand and inflation converged further towards the Governing Council's aim," the central bank said in the summary, which it calls "account", of the December 13-14 policy session.

"The language pertaining to various dimensions of the monetary policy stance and forward guidance could be revisited early in the coming year."

The dollar has dropped to around $1.2040 against the Euro Thursday afternoon, from an early high of $1.1928.

Eurozone industrial production grew the most in three months in November, Eurostat reported Thursday. Industrial output climbed 1 percent month-on-month, following October's 0.4 percent increase. This was the fastest growth since August and also exceeded the expected increase of 0.8 percent.

The German economy expanded at the fastest pace in six years in 2017, driven by domestic demand, preliminary data from Destatis showed Thursday.

Gross domestic product grew 2.2 percent in 2017 after expanding 1.9 percent in 2016. This was the fastest growth since 2011. The biggest euro area economy has expanded for the eighth year in a row.

The growth rate also exceeded the average of the last ten years by almost a percentage point. Nonetheless, growth was below economists' expectations of 2.4 percent.

France's economy expanded at a faster pace in the fourth quarter of 2017, according to the Bank of France survey. Gross domestic product is likely to have expanded 0.6 percent in the fourth quarter, revised up from 0.5 projected earlier. The economy had expanded 0.5 percent in the third quarter.

The buck rose to an early high of $1.3457 against the pound sterling Thursday, but has since fallen to around $1.3530.

The greenback has tumbled to nearly a month and a half low of Y111.080 against the Japanese Yen Thursday afternoon, from an early high of Y111.875.

Japan's leading index increased notably in November to the strongest level in nearly four years, preliminary figures from the Cabinet Office showed Thursday. The leading index, which measures the future economic activity, climbed to 108.6 in November from 106.5 in October. The figure also matched consensus estimate.

by RTT Staff Writer

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