US Dollar falls after Weak Economic data

The US dollar fell downwards against its major rivals after a series of disappointing economic data that came from US.

Additionally, jobless claims rose to 339 000, missing the median expectation for January of 330 000.

Previously the US currency has jumped up against the Australian dollar after unemployment in Australia reached its highest rate in a decade. According to the recent statistics, the Australian economy lost 3700 job during the first month of 2014. The Aussie went downwards after the unemployment in Australia increased to 6% in January, despite the predictions that it will decrease. Such kind of weakness makes it highly possible the Central Bank of Australia will cut the interest rate further. For now however it retains a neutral stance while closely watching the situation that is developing in the Australian economy. The new data from Australia makes it unlikely that the recent strong turnaround in housing activity, house prices, retail spending and business conditions will lead to any short term rate hikes, as some people have worried.
Meanwhile the British Pound rose to new highs after the Bank of England reported that unemployment has fallen faster than expected and will reach the threshold of 7% earlier than previously predicted. Bank of England economists now expect the 7% rate to be reached during the spring quarter. In addition to that the British economy will achieve a growth of 3,4% during the end of the year. This is 0,6% more than the previous forecast of Bank of England which was in the range of 2,8%.

Likewise, the dollar continued its downward trend against the yen after losses in the previous day, falling to ¥101.77 from ¥102.44 late Wednesday. The euro also advanced against the dollar, to $1.3677 from $1.3592.

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