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Dollar Trading Mixed Ahead Of Jobs Report


The dollar is turning in a mixed performance against its major rivals Thursday afternoon. The buck is down against its major European rivals, but is holding onto gains against the Japanese Yen.

Traders were left to sift through a large number of U.S. economic reports this morning. However, their main focus remains the January jobs report, which is set for release tomorrow morning.

With the release of the more closely watched monthly jobs report looming, the Labor Department released a report on Thursday unexpectedly showing a slight drop in first-time claims for U.S. unemployment benefits in the week ended January 27th.

The report said initial jobless claims edged down to 230,000, a decrease of 1,000 from the previous week's revised level of 231,000. Economists had expected jobless claims to rise to 238,000 from the 233,000 originally reported for the previous week.

A report released by the Labor Department on Thursday unexpectedly showed a modest decrease in U.S. labor productivity in the fourth quarter, although the report also showed a sharp jump in labor costs. The report said labor productivity edged down by 0.1 percent in the fourth quarter after surging up by a revised 2.7 percent in the third quarter.

Economists had expected productivity to climb by 1.0 percent compared to the 3.0 percent jump that had been reported for the previous quarter.

Meanwhile, the Labor Department said unit labor costs spiked by 2.0 percent in the fourth quarter after slipping by a revised 0.1 percent in the third quarter.

Labor costs were expected to increase by 0.8 percent compared to the 0.2 percent dip that had been reported for the previous quarter.

Growth in U.S. manufacturing activity saw a modest slowdown in the month of January, according to a report released by the Institute for Supply Management on Thursday.

The ISM said its purchasing managers index edged down to 59.1 in January from 59.3 in December, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to dip to 58.8.

Construction spending in the U.S. climbed to a new record high in the month of December, the Commerce Department revealed in a report on Thursday.

The Commerce Department said construction spending increased by 0.7 percent to an annual rate of $1.253 million in December after climbing by 0.6 percent to a revised $1.245 billion in November. Economists had expected construction spending to rise by 0.4 percent.

The dollar has dropped to around $1.25 against the Euro Thursday afternoon, from an early high of $1.2384.

Eurozone manufacturing activity expanded markedly at the start of the year, driven by solid expansions of both production and new orders, survey data from IHS Markit showed Thursday. The final factory Purchasing Managers' Index dropped to a three-month low of 59.6 in January from December's record high of 60.6.

The buck has fallen to around $1.4265 against the pound sterling this afternoon, from a high of $1.4156 this morning.

UK manufacturing logged further easing at the start of 2018, falling to its lowest level since June last year, but sustained its robust momentum. The IHS Markit/CIPS Purchasing Managers' Index for the manufacturing sector fell to 55.3 from 56.2 in December, survey data from IHS Markit showed Thursday. Economists had predicted a score of 56.5.

UK house price inflation accelerated to its highest level in 10 months in January, defying expectations for a slowing, results of a survey showed Thursday. The house price index rose 3.2 percent year-on-year after a 2.6 percent increase in December, results of the survey by the Nationwide Building Society showed. Economists had expected 2.5 percent gain.

The greenback rose to an early high of Y109.749 against the Japanese Yen Thursday, but has since retreated to around Y109.375.

The manufacturing sector in Japan continued to expand in January, and at a faster rate, the latest survey from Nikkei showed on Thursday with a Manufacturing PMI score of 54.8. That's up from 54.0 in December, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

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