Dollar Loses Ground Against Major Counterparts Ahead Of Jobs Data

(RTTNews) - The U.S. dollar stayed largely subdued on Thursday with traders digesting the European Central Bank's rate cut decision, and awaiting the crucial U.S. jobs data that could provide some clues about the likely timing of an interest rate cut by the Federal Reserve.

The European Central Bank (ECB) has cut interest rate for the first time since September 2019. The ECB today cut key rates by 25 basis points but raised inflation forecasts for 2024 and 2025.

The ECB has raised the headline inflation outlook for 2024 to 2.5% from 2.3% previously and upped the forecast for 2025 to 2.2% from 2%.

In U.S. economic news, the Labor Department released a report this morning showing first-time claims for U.S. unemployment benefits rose by more than expected in the week ended June 1st.

The Labor Department said initial jobless claims climbed to 229,000, an increase of 8,000 from the previous week's revised level of 221,000.

Economists had expected jobless claims to inch up to 220,000 from the 219,000 originally reported for the previous week.

Meanwhile, the Commerce Department released a report showing the U.S. trade deficit widened significantly in the month of April, as the value of imports jumped by much more than the value of exports.

The Commerce Department said the trade deficit surged to $74.6 billion in April from a downwardly revised $68.6 billion in March.

Investors now look ahead to Friday's closely watched monthly jobs report from the U.S., which could have a significant impact on the outlook for interest rates.

The Labor Department report is expected to show employment increased by 185,000 jobs in May after climbing by 175,000 jobs in April, while the unemployment rate is expected to remain at 3.9%.

The dollar index, which advanced to 104.37 in early New York session after remaining weak till then, drifted down gradually to 104.11, down 0.15% from the previous close.

Against the Euro, the dollar weakened to 1.0891 from 1.0871. The dollar edged down marginally against Pound Sterling to 1.2790. Against the Japanese currency, the dollar firmed to 155.63 yen.

The dollar weakened to 0.6667 against the Aussie, easing from 0.6647. Against Swiss franc, the dollar dropped to CHF 0.8898 a unit. The dollar shed ground against the loonie as well, dropping to C$ 1.3673.