UPDATE: Dollar holds gain after jobless claims, British pounds weakens further
By Anneken Tappe and Rachel Koning Beals
Sterling hits one-month low after May speech
The dollar on Thursday extended its gain against most European rivals on Thursday, boosted by better-than-expected jobless claims setting a positive tone ahead of Friday's jobs report, that could point to the likelihood of additional interest-rate hikes in 2017.
A significant move in the pound, which fell below $1.32 for the first time in almost a month, was among the more prominent moves drawing the attention of currency traders.
Where are currencies trading?
The ICE U.S. Dollar Index , which measures the U.S. currency against six rivals, was up 0.3% at 93.767. The WSJ U.S. Dollar Index --a broader measure of the greenback--gained 0.2% to 86.80.
The euro was buying $1.1726, down from $1.1761. Meanwhile, the British pound fell to $1.3140--the lowest level since early September--versus $1.3246 late Wednesday. Against the euro the pound plunged half a percent, with one euro buying GBP0.8924.
Another big mover was the Australian dollar , which tumbled to its lowest level since mid-July against the U.S. currency, after some disappointing data down under. One Aussie last bought $0.7807, down from $0.7864 late Wednesday in New York.
Compared with the Swiss franc , the greenback bought 0.9777 francs, up from 0.9749 late Wednesday.
The outlier was the Japanese yen , against which the dollar slipped to buy Yen112.66, compared with Yen112.75.
What's driving the market?
The U.S. data calendar picks up, and Fed speeches continue.
Already, Friday's release of nonfarm payrolls and unemployment data for September is in focus for traders, as the data are expected to give further clues regarding the likelihood of a December interest rate increase by the Federal Reserve.
Read:Hurricanes may make it look like U.S. 'lost' jobs for first time since 2010 (http://www.marketwatch.com/story/hurricanes-may-make-it-look-like-us-lost-jobs-for-the-first-time-since-2010-2017-10-01)
(http://www.marketwatch.com/story/hurricanes-may-make-it-look-like-us-lost-jobs-for-the-first-time-since-2010-2017-10-01)European traders were digesting the latest meeting minutes from the European Central Bank (http://www.marketwatch.com/story/ecb-discussed-qe-tapering-options-at-last-meeting-2017-10-05) in which officials discussed how to put the brakes on its quantitative-easing program, as well as the relative strength of the euro.
In the U.K., the pound reacted to Prime Minister Theresa May's "disastrous" speech (http://www.marketwatch.com/story/uk-leader-theresa-mays-slogan-literally-fell-apart-during-her-disastrous-speech-2017-10-04)at the Tory party conference on Wednesday, alongside continued gridlock with Brussels over negotiations around the U.K.'s exit from the European Union.
What are market participants saying?
"The dollar continues to draw support from the view that the Fed is now likely to raise lending rates again in December and that any downside surprises to economic data over the near-term will likely be written off as having been impacted by Hurricanes Harvey and Irma," wrote Omer Esiner, chief market analyst at Commonwealth Currency Exchange, in a note on Thursday morning.
On sterling, Connor Campbell, financial analyst, at Spreadex, said an accumulation of factors had built to "chip away at the currency's confidence," including an Standard & Poor's comment that it's "skeptical" of a Bank of England rate increase, a report that car sales may have fallen 10% in September, leaving the U.K. industry on track for its annual decline since 2011 and a warning from furniture company DFS for the latest sign that the retail sector is struggling.
"Add on top of all this Brexit--just, like, in general--and it's not hard to see why sterling is continuing to given back chunk after chunk of September's surge," he said.
Which U.S. data and Fed speakers are influencing trade
Jobless claims for the week ending Sept. 30 (http://www.marketwatch.com/story/jobless-claims-drop-12000-to-260000-as-disruptions-from-hurricanes-ease-2017-10-05) came in at 260,00, below the MarketWatch consensus estimate of 265,000. The U.S. trade deficit for August was reported at $42.4 billion (http://www.marketwatch.com/story/us-trade-deficit-falls-to-11-month-low-2017-10-05), versus a $42.6 billion consensus forecast.
August factory orders rose 1.2% (http://www.marketwatch.com/story/us-factory-orders-strengthen-in-august-2017-10-05), beating MarketWatch consensus estimates of 1.1% by a slim margin. In the previous month, orders had contracted 3.3%.
Kansas City Fed President Esther George will speak at that same conference on 'job polarization and the U.S. labor market at that same conference at 4:30 p.m. Eastern.
-Anneken Tappe; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires