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Dollar Higher As Building Permits Surge, Jobless Claims Unexpectedly Drop


The U.S. dollar spiked up against its key counterparts in the European session on Thursday, as U.S. weekly jobless claims fell more than expected last week, while building permits exceeded forecasts in April, easing worries about a slowdown in economy.

Data from the Labor Department showed that first-time claims for U.S. unemployment benefits dropped more than expected in the week ended May 11.

The report said initial jobless claims slid to 212,000, a decrease of 16,000 from the previous week's unrevised level of 228,000. Economists had expected jobless claims to dip to 220,000.

New residential construction in the U.S. showed a substantial increase in the month of April, according to a report by the Commerce Department.

The Commerce Department said housing starts surged up by 5.7 percent to an annual rate of 1.235 million in April after climbing by 1.7 percent to a revised rate of 1.168 million in March.

Data from the Federal Reserve Bank of Philadelphia showed growth in Philadelphia-area manufacturing activity showed a significant acceleration in the month of May.

The Philly Fed said its diffusion index for current general activity jumped to 16.6 in May after falling to 8.5 in April, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to inch up to 9.0.

The reports also reduced worries about a rate cut by the Fed by year-end.

Investors cheered upbeat earnings results from Cisco and Walmart that overshadowed concerns about the U.S. government's decision to blacklist Huawei, in an indication of heightened trade tensions between the U.S. and China.

The U.S. treasury yields also spiked up, with the yield on 10-year U.S. Treasuries rising to 2.4 percent.

The currency held steady against its major counterparts in the Asian session, barring the yen.

The greenback added 0.5 percent to a 3-month high of 1.2794 against the pound, from a low of 1.2852 hit at 12:30 am ET. The pair had ended Wednesday's trading at 1.2840. Further uptrend may take the greenback to a resistance around the 1.26 level.

The greenback was up 0.3 percent at a 3-day high of 1.0107 against the franc, after having dropped to 1.0074 at 3:30 am ET. At yesterday's close, the pair was valued at 1.0087. On the upside, 1.03 is likely seen as its next resistance level.

The greenback was 0.3 percent higher at 1.1185 against the euro, following a low of 1.1224 touched at 5:00 am ET. The greenback had finished Wednesday's trading at 1.1200 versus the euro. Next key resistance for the greenback is seen around the 1.09 region.

Data from Eurostat showed that the euro area trade surplus declined in March on higher imports.

The trade surplus fell to a seasonally adjusted EUR 17.9 billion from EUR 20.6 billion in February. The surplus was also below the forecast of EUR 19.4 billion.

The greenback appreciated to 109.84 against the yen, its highest since May 13, and recorded a 0.5 percent uptick from a low of 109.34 seen at 9:30 pm ET. The pair had closed deals at 109.60 on Wednesday. Should the greenback continues its uptrend, 111.00 may be seen as its next resistance level.

Data from the Bank of Japan showed that Japan producer prices rose 0.3 percent on month in April - unchanged from the previous two months.

On a yearly basis, producer prices climbed 1.2 percent - easing from 1.3 percent in the previous month.

The greenback rose back to 0.6905 against the aussie, edging closer to pierce over a 4-month high of 0.6892 registered at 9:30 pm ET. The aussie-greenback pair was quoted at 0.6928 when it ended deals on Wednesday. The greenback is seen finding resistance around the 0.67 level.

Data from the Australian Bureau of Statistics showed that Australia's jobless rate came in at a seasonally adjusted 5.2 percent in April.

That was above forecasts for 5.0 percent and up from the upwardly revised 5.1 percent in March.

The U.S. currency rebounded to 0.6557 against the kiwi, after falling to a 2-day low of 0.6583 at 5:00 am ET. The currency had already set an 8-day high of 0.6545 at 2:00 am ET. The greenback was worth 0.6564 per kiwi at yesterday's close. The greenback is likely to challenge resistance around the 0.64 level, if it rallies again.

Following a decline to a 6-day low of 1.3401 against the loonie at 6:15 am ET, the greenback staged a modest recovery to 1.3432. Continuation of the greenback's uptrend may take it to a resistance around the 1.37 region.

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