Dollar loses ground on yen and euro

The dollar fell to a session low versus the yen as well as extended losses versus the euro following job data from the US revealing that the amount of Americans claiming unemployment benefits unexpectedly increased last week.

The greenback dropped to a two-day low of 79.14 yen. It had earlier been trading at 79.28 and was last seen trading at 79.24, down on the day by 0.2 per cent. The euro climbed as high as $1.2582 against $1.2558 before the most recent data. It last traded 0.2 per cent up on the day at $1.2578.

The jobless claims data indicated that the US labour market has a persistent weakness after it has stumbled badly over recent months. Toronto-based RBC Capital Markets’ chief technical analyst George Davis said that the rising number of claims seems to be key for the market.

He went on to say that over the short term that will be a slight bearish factor for the greenback, but that he isn’t of the opinion that the CPI will have a massive market impact because inflation is not the focus at present. He added that the main worry remains the employment area.

Separate data revealed that US consumer prices dropped in May by the highest amount in more than three years, possibly offering the US Federal Reserve a greater opportunity to help an economy which is showing no indications of weakening.