October 23, 2009
The dollar rose slightly against major currencies on Thursday amid a strong leading economic index and weaker-than-expected job data.
The Conference Board Leading Economic Index (LEI) for the U.S. increased 1.0 percent in September, following a 0.4 percent gain in August. It was the six consecutive gain of the index, which intended to forecast economic activities in the future three to six months. The LEI grew 5.7 percent in the past six months, its highest pace since 1983.
"Except for average workweek and building permits, all the leading indicators contributed positively to the index this month," said Ataman Ozyildirim, economist at The Conference Board.
The report also showed the contraction in the coincident economic index has halted in recent months, but the continued downtrend in employment is keeping this index of current economic conditions from rising faster. U.S. initial claims of jobless benefits rose unexpectedly by 11,000 to 531,000 last week, the Labor Department reported.
The rise may point to a need to temper expectations for a sharp improvement in the decline in nonfarm payrolls during the month, said analysts of Nomura Economic Research.
With unemployment rate at a 26-year high of 9.8 percent, the weak labor market remains a key obstacle to U.S. economic recovery.
Quarterly results of communication giant AT&T, diversified manufacturer 3M, and fast food chain McDonald's beat Wall Street expectations. But earning reports from some other major companies, including e-commerce site eBay and office equipment producer Xerox, disappointed investors.
Central banks may act to weaken the euro should its gains against the dollar persist, according to UBS AG, the world's second-biggest currency trader.
"If euro-dollar continues to gain in a volatile manner ahead of the November Group of 20 (meeting of finance ministers and central bank governors), action at that meeting can be expected," said Amelia Bourdeau, a currency strategist of UBS.
The euro bought 1.5026 dollars in late New York trading compared with 1.5036 dollars it bought late Wednesday. The pound fell to 1.6624 dollars from 1.6631 dollars. The dollar rose to 1.0486 Canadian dollars from 1.0391 Canadian dollars, and rose to 1.0048 Swiss francs from 1.0047 Swiss francs. It rose to 91.29 Japanese yen from 91.06 Japanese yen.