Forexpros – The U.S. dollar remained lower against all of its major counterparts on Thursday, as market sentiment was supported by indications that the U.S. labor market is improving, but sustained concerns over the European economy weighed on risk appetite.
During U.S. morning trade, the dollar was lower against the euro, with EUR/USD rising 0.43% to hit 1.3307.
Sentiment on the single currency was dented after the European Commission forecast that the euro zone’s economy would contract by 0.3% in the first quarter after dropping by the same amount in the last quarter of 2011.
Two consecutive quarters of contraction signal a recession.
The euro strengthened broadly earlier, after German research institute Ifo said its Business Climate Index rose to109.6 in February from a reading of 108.3 the previous month, surpassing expectations for an increase to 108.8, fuelling hopes that the euro zone’s largest economy is weathering the impact of the debt crisis in the region.
The greenback was also lower against the pound, with GBP/USD adding 0.20% to hit 1.5700.
The pound found support after the Confederation of British Industry said in a report earlier that U.K. factory orders rebounded to hit a six-month high this month, rising by 13 points to minus 3.0, from a reading of minus 16 in January.
The greenback was lower against yen and the Swiss franc, with USD/JPY slipping 0.11% to hit 80.20 and USD/CHF shedding 0.52% to hit 0.9054.
Japan’s Prime Minister Yoshihiko Noda said earlier that he wants to have one-on-one talks with the Bank of Japan governor more frequently and to boost cooperation with the central bank.
The comments came after the BoJ’s decision last week to increase the size of its asset-purchase program to JPY30 trillion, sending the yen broadly lower.
In addition, the greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD retreating 0.22% to hit 0.9975, AUD/USD climbing 0.50% to hit 1.0690 and NZD/USD advancing 0.58% to hit 0.8339.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.41% to hit 78.97.
In the U.S., a report by the Department of Labor showed that the number of individuals filing for initial jobless benefits in the week ending February 18 held steady at 351,000, confounding expectations for an increase of 3,000 to 354,000.
Jobless claims have remained below 400,000, a level historically associated with an improving labor market, in 15 of the past 17 weeks.
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