USD/CAD Holds Steady on Better Initial Jobless Claims Data

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The US dollar is holding steady on Thursday after the US government reported a lower-than-expected number of Americans filing for unemployment benefits. The greenback, which has been on a tear over the last three months, is looking to add to its gains in the home stretch of 2021. Will strong data and omicron variant concerns drive the buck’s ascent?

According to the Bureau of Labor Statistics (BLS), initial jobless claims totaled 222,000 in the week ending November 27, slightly higher than the 194,000 claims in the previous week. The market had penciled in a boost of 240,000.

Continuing jobless claims fell to 1.956 million, while the four-week average, which eliminates week-to-week volatility fell below 239,000.

The weekly snapshot of the labor market saw substantial declines in Virginia, Texas, and California.

On Wednesday, the ADP employment change numbers highlighted solid private-sector growth, 534,000 new jobs. This was slightly higher than the median estimate of 525,000.

The US government will release its November jobs report on Friday. The US economy is forecast to have added 550,000 in November, lowering the unemployment rate to 4.5%.

In other economic data, the IHS Markit manufacturing purchasing managers’ index (PMI) eased to 58.3 last month, while the Institute of Supply Management (ISM) manufacturing PMI rose to 61.1.

The US Treasury market was mostly mixed toward the end of the trading week, with the benchmark 10-year yield down 0.018% to 1.416%. The one-year bill dipped 0.003% to 0.251%, while the 30-year bond shed 0.039% to 1.739%.

The US Dollar Index (DXY), which measures the greenback against a basket of currencies, tumbled 0.14% to 95.89, from an opening of 96.07. The index is on track for a weekly loss of about 1%, but it is still up 6.7% year-to-date.

The USD/CAD currency pair was essentially flat at 1.2818 at 13:31 GMT on Thursday. The EUR/USD climbed 0.19% to 1.1342, from an opening of 1.1321.

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