October 6, 2016 / 3:37 PM / 10 months ago

FOREX-Dollar index hits 2-month high on upbeat U.S. data

5 Min Read

* Dollar gets lift with U.S. jobless claims near 43-year low
    * Greenback hits one-month peak versus yen
    * ECB commitment on bond purchases puts pressure on euro
    * Worries on "hard" Brexit knocks pound to 31-year low vs
dollar

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Oct 6 (Reuters) - The dollar gained against a
basket of currencies on Thursday, hitting its strongest level in
two months as encouraging data on U.S. jobs reinforced the view
the Federal Reserve would raise interest rates at the end of the
year.
    Sterling on the other hand fell to a fresh 31-year low
versus the greenback on renewed anxiety about the repercussion
from Britain's "hard" exit from the European Union. 
    First-time filings for U.S. jobless benefits unexpectedly
fell to a near 43-year low, the U.S. Labor Department said.
 
    The claims figures came ahead of the government's payrolls
report due at 8:30 a.m. (1230 GMT) on Friday, in which analysts
polled by Reuters forecast a hiring of 175,000 workers in
September. 
    "It looks like the U.S. economy is righting itself at the
end of the third quarter," said Christopher Vecchio, currency
analyst at DailyFX in New York.
    The growing spread between U.S. and German bond yields has
also bolstered the greenback. The difference between two-year
U.S. and German government debt hovered at 1.51 percentage
points on Thursday, its widest in a decade. 
 
    The dollar index was last up 0.5 percent at 96.552 after
touching its highest level since early August. 
    The greenback reached a one-month peak versus the yen, last
up 0.4 percent at 103.92 yen. 
    The euro slipped against the dollar after the European
Central Bank released minutes on its Sept. 7-8 meeting where
policymakers agreed on ongoing monetary stimulus to support the
euro zone economy. 
    The minutes undermined speculation the ECB would consider
tapering its monthly bond purchases as it may conclude its
quantitative easing program, perhaps as early as March 2017.
    The single currency was down 0.3 percent at $1.1166. 
    The euro touched a near five-week high versus the yen at
116.28 yen before retreating to 116.07 yen, up 0.1 percent on
the day. 
    Sterling slipped against the dollar as investors fretted
over signs that the British government is ready to prioritize
controls on immigration over membership of the European Union's
single market.
    The pound was 0.9 percent lower at $1.2634 after touching a
fresh three-decade low of $1.2622.
    It fell to a five-year low against euro at 88.51 pence
earlier Thursday. It was last down 0.5 percent at 88.30 pence
per euro. 
========================================================
    Currency bid prices at 11:23AM (1523 GMT)
 Description  Last           U.S. Close  Pct Change  YTD Pct
                              Previous                Change
                              Session                
 Euro/Dollar  $1.1166        $1.1202     -0.32%      +2.82%
 Dollar/Yen   103.9900       103.4900    +0.48%      -13.69%
 Euro/Yen     116.14         115.96      +0.16%      -11.85%
 Dollar/Swis  0.9800         0.9740      +0.62%      -2.18%
 s                                                   
 Sterling/Do  1.2646         1.2748      -0.80%      -14.19%
 llar                                                
 Dollar/Cana  1.3224         1.3175      +0.37%      -4.44%
 dian                                                
 Australian/  0.7568         0.7622      -0.71%      +4.03%
 Dollar                                              
 Euro/Swiss   1.0943         1.0914      +0.27%      +0.52%
 Euro/Sterli  0.8828         0.8787      +0.47%      +19.83%
 ng                                                  
 NZ           0.7146         0.7166      -0.28%      +4.70%
 Dollar/Doll                                         
 ar                                                  
 Dollar/Norw  8.0459         8.0159      +0.37%      -8.98%
 ay                                                  
 Euro/Norway  8.9875         8.9917      -0.05%      -6.39%
 Dollar/Swed  8.6211         8.5877      +0.01%      +2.51%
 en                                                  
 Euro/Sweden  9.6274         9.6262      +0.01%      +4.62%
    

 (Additional reporting by Patrick Graham in London; Editing by
Mark Trevelyan and Meredith Mazzilli)

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