Forexpros – The U.S. dollar traded higher against its major counterparts Thursday, as worries over rising Spanish borrowing costs and the economic outlook created a risk off environment.
During U.S. afternoon trade, the dollar was up against the euro, with EUR/USD shedding 0.63% to hit 1.3059.
The single currency came under broad selling pressure as Spain’s borrowing costs continued to rise in the aftermath of Wednesday’s poorly received government bond auction.
The yield on the country’s 10-year bond climbed to 5.71% earlier, the highest level since mid-December.
Meanwhile, concerns over the outlook for growth in the euro zone mounted following a recent string of weak economic data.
Earlier Thursday, official data showed that German industrial production dropped 1.3% in February, more than expectations for a 0.5% drop, renewing concerns over the outlook for the bloc’s largest economy.
In the U.S., official data showing that initial jobless claims fell to the lowest level in nearly four years last week supported expectations that the Federal Reserve will hold off on implementing fresh monetary easing measures.
The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending March 31 fell to a seasonally adjusted 357,000, the lowest since April 2008 and slightly short of expectations for a decline to 355,000.
The greenback was also higher against the pound, with GBP/USD losing 0.42% to hit 1.5822.
The Bank of England kept its benchmark interest rate unchanged at a record low 0.5%, in a widely expected move and announced no change to the size of its asset purchase facility which stands at GBP325 billion, following a GBP50 billion increase in February.
The announcement came after unexpectedly weak data on U.K. factory output cast doubts over the strength of the country’s economic recovery.
The Office for National Statistics said that manufacturing production in the U.K. fell by 1.0% in February and the previous month’s figures was revised down to show a drop of 0.3%, giving an annual decline of 1.4%.
Industrial production rose 0.4% in February, slightly above expectations for a 0.3% gain.
The greenback was slightly lower against the yen but pushed higher against the Swiss franc, with USD/JPY dipping 0.08% to hit 82.39 and USD/CHF climbing 0.49% to hit 0.9203.
Elsewhere, the greenback was lower against its Canadian, Australian and New Zealand cousins, with USD/CAD losing 0.42% to hit 0.9920,AUD/USD rising 0.31% to hit 1.0301 and NZD/USD easing up 0.12% to hit 0.8157.
Government data showed that Canada added 82,300 jobs in March, far more than forecasts for an increase of 10,000. The unemployment rate ticked down to 7.2%, from 7.4% in February. Analysts had expected the jobless rate to climb to 8.0% last month.
A separate report showed that the number of new building permits issued in Canada rose by a seasonally adjusted 7.5% in February, more than doubling expectations for a 3.0% gain.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.49% to hit 80.30.
Meanwhile, investors are awaiting U.S. non farm payrolls and the long Easter weekend.
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