Dollar Slightly Weaker After June Jobs Growth Falls Short

(RTTNews) - The dollar is down slightly against all of its major competitors Thursday, following the mixed results of the June employment report. Employment increased by less than expected for the month, but the unemployment rate dropped to the lowest level in 7 years.

A closely watched Labor Department report released Thursday morning showed weaker than expected U.S. job growth in the month of June, although the unemployment rate still fell to a seven-year low. The Labor Department said non-farm payroll employment increased by 223,000 jobs in June, modestly below the addition of 230,000 jobs anticipated by economists.

Nonetheless, the unemployment rate still fell to 5.3 percent in June from 5.5 percent in May. Economists had expected the unemployment rate to dip to 5.4 percent. The bigger than expected decrease pulled the unemployment rate down to its lowest level since hitting 5.0 percent in April of 2008.

While the data was largely overshadowed by the release of the monthly jobs report, the Labor Department also released a report on Thursday showing an unexpected increase in initial jobless claims in the week ended June 27th.

The report said initial jobless claims rose to 281,000, an increase of 10,000 from the previous week's unrevised level of 271,000. The modest increase came as a surprise to economists, who had expected jobless claims to edge down to 270,000.

New orders for U.S. manufactured goods fell by much more than expected in the month of May, according to a report released by the Commerce Department on Thursday. The report said factory orders fell by 1.0 percent in May following a revised 0.7 percent decrease in April.

Economists had expected orders to dip by 0.5 percent compared to the 0.4 percent drop originally reported for the previous month.

Meanwhile, the eurozone finance ministers and the group of international creditors have halted further negotiations with Greece until the outcome of the Sunday referendum and rejected any bailout extension.

In a letter to Greek Prime Minister Alexis Tsipras, Eurogroup President Jeroen Dijsselboem said there is no ground for further talks at this point given the political situation, rejection of the previous proposals, the Sunday referendum and the Greek government recommendation to vote 'No'.

"There will be no talks in the coming days, either at Eurogroup level or between the Greek authorities and the institutions on proposals or financial arrangements. We will simply await now the outcome of the referendum on Sunday and take into account the outcome of that referendum," Dijsselboem added.

Dijsselboem said the finance ministers also discussed and reaffirmed the last Saturday decision with regard to the request by the Greek Prime Minister about the extension of the old program. The ministers rejected the extension request on common grounds due to the unchanged political situation. The dollar has fallen to around $1.1085 against the Euro Thursday afternoon, from yesterday's high of $1.1030.

Eurozone producer prices continued to decline in May largely due to notable weakness in energy costs, data from Eurostat showed Thursday. Producer prices fell 2 percent year-on-year in May following a 2.1 percent drop in April. The annual fall matched economists' expectations.

The buck is nearly unchanged against the pound sterling Thursday, hovering around the $1.56 level.

The British construction sector expanded at a faster than expected rate in June, with the growth the fastest in four months, on higher output and new orders, survey figures from Markit Economics and Chartered Institute of Procurement & Supply showed Thursday.

The seasonally adjusted Markit/CIPS UK Construction Purchasing Managers' Index rose to 58.1 in June from 55.9 in the previous month. Economists had expected the index to rise to 56.5.

U.K. house prices dropped in June from May taking the annual growth to the lowest in two years, data from the Nationwide Building Society revealed Thursday. The annual increase in house prices moderated to a two-year low of 3.3 percent in June from 4.6 percent a month ago. Economists had forecast a 4.5 percent rise for June.

The greenback climbed to an early high of Y123.717 against the Japanese Yen Thursday, but has since pulled back to around Y123.060.

The monetary base in Japan surged 34.2 percent on year in June, the Bank of Japan said on Thursday - coming in at 325.047 trillion yen. That follows the 35.6 percent spike in May.

Japanese companies' inflation expectations remained broadly unchanged in June from the prior quarter, a survey from the Bank of Japan showed Thursday. According to Inflation Outlook of Enterprises, firms expect consumer prices to rise 1.4 percent in the year ahead, the same rate as projected in March.

Copyright(c) 2024 RTTNews.com, Inc. All Rights Reserved