Dollar makes gains on positive jobless statistics

Published: 17 Oct at 6 AM Tags: Euro, Dollar,

The dollar has made gains against the yen and euro following an announcement by the US Labor Department that last week saw jobless claims drop to their lowest level in 14 years. The greenback has also been given a boost by news issued by the Federal Reserve that output from utilities, mines and factories was up 1.0 per cent last month.

The euro is trading at $1.2807, a drop of 0.23 per cent after earlier hitting $1.2885. The single currency is also at its lowest level in 11 months against its Japanese rival at 134.16 yen. Deflation in five eurozone countries as well as a disappointing sell off of Spanish debt has put pressure on the euro.

However, gains made by the dollar were pared by an announcement by James Bullard, St Louis Fed President, that the central bank may continue with its programme of bond buying because of the drop in inflation expectations.

The announcement has helped to push the British pound as it is now possible that the Bank of England could tighten its monetary policy before the Fed. Following a low of 105.21 earlier in the week the dollar has gained 0.5 per cent and is currently trading at 106.33 yen.

The dollar index has dropped 0.28 per cent to 84.911.