(Bloomberg) -- The dollar gauge traded weaker as traders assessed the Federal Reserve’s interest-rate path, with a rise in claims for unemployment taking precedence over a hotter-than-expected inflation print. The Japanese yen and Swiss franc were among the best performers on safe-haven appeal.
- The Bloomberg Dollar Spot Index traded weaker, after rising in the last eight sessions
- Underlying US inflation rose more than forecast in September, pointing to a stalling progress in brining price growth to the target
- Jobless claims rose 33k to 258k in Oct. 5 week compared with median est. 230k, according to Labor Department data
- Bond investors lifted wagers that the Fed will cut interest rates by 25bp
- “The claims data tells you that underlying activity remains a mixed bag,” said Aroop Chatterjee, a strategist at Wells Fargo. “We think this solidifies the November 25bp rate cut and potentially takes a bit of wind out of the USD’s sails near-term”
- “CPI reading today is definitely going to add to the chatter following the Fed minutes yesterday that the 50pb move in September may have, in fact, been too big and make the central bank much more cautious moving forward,” said Helen Given, a foreign-exchange trader at Monex Inc.
- “CHF and JPY are the big winners maybe because of the hurricane keeping general risk appetite on the downside,” she said
- USD/JPY fell 0.5% to 148.52
- USD/CHF declined 0.4% to 0.8576
- “Market focus has well and truly shifted to the labor market in recent months, and the uptick in jobless claims seems to be catching more of the attention,” said Sam Zief, head of global FX strategy at JPMorgan Private Bank
- He expects a 25bp cut in November by the Fed and that “should keep the dollar supported in the short-term as other central banks accelerate their pace of rate cuts and the US election comes into focus”
- EUR/USD rose 0.1% to 1.0947
- USD/CAD up 0.2% to 1.3743, highest since Aug. 13; pair up a seventh day, longest streak since July
- NZD/USD rises 0.4% to 0.6089 after losing 1.2% on Wednesday
- AUD/USD climbs 0.2% to 0.6732
- Some information comes from FX traders familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly
Reporting by Anya Andrianova and Vassilis Karamanis
