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Dollar Exhibits Strength On Upbeat Economic Data

The U.S. dollar rose to near 3-week high on Thursday as its safe haven appeal and upbeat U.S. economic data aided its advance against most of its major rivals.

Worries about a no-deal Brexit weighed on Pound Sterling, while caution ahead of next week's European parliamentary elections, uncertainty about trade deal and widening euro area trade deficit rendered the euro subdued.

The dollar index rose to 97.88, gaining in strength as the day progressed. It was last seen moving around 97.85, up nearly 0.3% from previous close.

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 euro fetched $1.1175, down 0.25%, compared to previous close of $1.1204.

Sterling was under pressure due largely to Brexit related issues. Prime Minister Theresa May's Brexit deal is due to be put before the parliament one more time next month. May has reportedly held talks with senior party MPs who are said to be asking her to set a date for her resignation.

The dollar was up nearly 0.4%, at $1.2798 a sterling.

The Japanese currency was trading at 109.83 a dollar, weakening from around 109.60 a dollar.

The loonie and Swiss franc were down 0.17% and 0.13%, with the respective USD-CAD and USD-CHF pairs trading at 1.3461 and 1.0100.

The Aussie was down more than 0.5% against the dollar, at 0.6892.

The Chinese yuan dropped to a fresh low for 2019 against the greenback as trade worries lingered.

In U.S. economic news, the Labor Department data said initial jobless claims slid to 212,000 in the week ended May 11th, 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.

A separate report from the Commerce Department showed a substantial increase in new residential construction in the month of April.

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

Building permits, an indicator of future housing demand, also rose by 0.6% to a rate of 1.296 million in April after edging down by 0.2% to a revised rate of 1.288 million in March.

The pace of growth in regional manufacturing activity saw a significant acceleration in May, according to a report from The Philadelphia Federal Reserve.

The Philly Fed said its diffusion index for current general activity surged up 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 jump by the headline index was partly due to a significant increase by the shipments index, which spiked to 27.6 in May from 18.4 in April.

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