By Polya Lesova, Sarah Turner and Sam Mamudi, MarketWatch
NEW YORK (MarketWatch) — The U.S. dollar furthered its gains against major rivals on Thursday after data showed jobless claims fell in the latest week.
The dollar index (DXY 80.32, +0.33, +0.41%) , a measure of the greenback’s performance against a basket of six other currencies, rose to 80.292 on Thursday, up from 79.985 in late North American trading Wednesday.
The dollar rebounded from losses during Asian trading on Thursday.
The gains improved following the Labor Department’s report that the number of U.S. workers filing new applications for unemployment benefits fell by 17,000 last week to 421,000. The figure was better than expected. Read in full about the latest jobless claims numbers.
The greenback has gained ground this week, in tandem with a rise in U.S Treasury yields, amid expectations that a recently-agreed plan to extend tax breaks will boost economic growth in the U.S. but could also spur higher inflation.
“Since the summer, a weak growth outlook and more quantitative easing from the Federal Reserve have kept a lid on Treasury yields,” said Kathleen Brooks, a research director at Forex.com.
“But since President Obama announced the extension of the Bush tax cuts earlier this week, Treasury yields have shot up as the growth outlook for the U.S. is deemed to have improved,” Brooks wrote in a note. “This is supporting the dollar as well as stock markets.”
U.S. stocks modestly higher on Wall Street on Thursday morning. Read the latest Market Snapshot.
Meanwhile, the British pound edged lower after the Bank of England made its latest monetary-policy announcement.
The British pound fell 0.4% to trade at $1.5742 after the Bank of England's said in a widely-expected move that it would keep interest rates on hold at 0.5% and to make no changes to its asset-purchase program. Read about the Bank of England’s rate decision.
The dollar bought 83.91 Japanese yen (USDYEN 83.9700, -0.0600, -0.0714%) , down a fraction from late Wednesday.
Japan upwardly revised its reading for third-quarter gross domestic product. The Cabinet Office said GDP rose an annualized 4.5% in the third quarter. That was above last month’s 3.9% reading, Dow Jones Newswires reported.
The euro (EURUSD 1.3183, -0.0077, -0.5807%) fell 0.5% to $1.3192.
“We expect the euro to remain under pressure given the continued problems in the euro zone, especially with European Union officials now talking the euro lower, as well as the deterioration in global liquidity conditions,” strategists at BNP Paribas wrote in a note.
The Australian dollar (AUDUSD 0.9837, +0.0039, +0.3982%) climbed 0.5% against the greenback, trading at 98.5 U.S. cents after the Australian unemployment rate ticked down to 5.2% in November, from October’s 5.4% reading.
“The Australian dollar is sensitive to the unemployment rate given that the Reserve Bank of Australia is carefully watching labor supply and wages growth,” noted strategists at Barclays Capital.
The number of employed people rose a seasonally-adjusted 54,600 to 11.4 million, while the number of unemployed people decreased by 19,500 to 627,800. See story on decline in Australia’s jobless rate.
“In an interesting perspective of Australia versus the U.S. … taking account of relative population size, this employment outcome today is roughly equivalent to a nonfarm payrolls increase of 760,000,” wrote strateghttp://www.marketwach.com/story/dollar-index-pulls-back-after-gains-2010-12-09ists at TD Securities.
The New Zealand dollar (NZDUSD 0.7459, -0.0022, -0.2943%) was little changed against the greenback after the country’s central bank kept its key cash rate on hold at 3%.
The Bank of Korea also kept its benchmark interest rate on hold on Thursday, this time at 2.5%, with the central bank noting that risks remain to the domestic economy.
