The U.S. dollar continued to strengthen against the Euro and sterling on Thursday after hitting a 24-year high against the Japanese yen, as investors expected higher U.S. interest rate hikes and concerns over the health of the European economy.
The Euro continued to depreciate against the US dollar by 0.66% to a trading level of 0.9990. While the pound hit a new two-and-a-half-year low of $1.15545 down around 0.5%, due to demand for the US dollar.
The US dollar index which measures the US dollar against six major currencies traded up 0.54% to trade at 109,250.
Initial claims for unemployment insurance fell to the lowest level since late June last week, a sign that the labor market is resilient in a slowing economy.
Claims totaled 232,000 for the week ended Aug. 27, a drop of 5,000 from the previous period and the lowest since June 25, according to a Labor Department report released earlier. Economists even predicted a reading of 245,000.
This figure comes a day before NFP data is released tomorrow. Wall Street expected the report to show that employment gains in August of 318,000.
Even after reaching new records, USD strength has scope to strengthen further, boosted by the global slowdown and European energy problems in particular,” said analysts at Generali Insurance Asset Management.
Expectations for a US rate hike of 75 basis points at next month's Federal Reserve meeting rose on the back of strong economic data, with the last Fed funds futures showing around a 75% chance of such an increase.
The market is now focusing on important things like the NFP data that will be released tomorrow.
