US dollar almost unchanged after economic data from the United States

US dollar remained almost unchanged close to 10-week low against the Japanese yen on Thursday as markets reflected the series of data from the United States.

During late European trade, the greenback was trading close to its lowest level since April 4th versus the yen, with USD/JPY erasing 1.81% to hit 94.24.

The Department of Labor in the United States reported minutes ago that Initial Jobless Claims dropped in number during the week until 08.06.2013 to 334 000. This value was close to almost 5-year low. During the preceding week the number of people, who filed for unemployment assistance, was higher, 346 000. Preliminary estimates pointed a slighter decrease to 345 000 claims. The number of jobless claims decreased for the second consecutive week, showing a stable labour market development in the country. New jobless claims rose in number during the past weeks, but during the most recent ones the tendency was quite the opposite. The average value of the indicator, lacking seasonal effects, declined by 7 250 to 345 250 claims for the last four weeks. US economy managed to continue adding new job positions at a stable rate, as was confirmed last week, when employment data from the United States pointed 175 000 new job posts, opened during May.

Additionally, in monthly terms, US Retail Sales rose by 0.6% in May to 421.15 billion USD, surprising estimates of a 0.4% rise, while during the preceding month the indicator recorded a 0.1% jump. Retail sales jumped by 4.3% in May on annual basis. This indicator is of extreme vitality to US economic recovery, as it is the main driving force of growth. Consumer expenditures form almost 2/3 of US Gross Domestic Product. Automobiles and trucks purchases were most favorable to the recorded increase in May. Auto sales and auto equipment sales increased by 1.8%, having the best performance for the last six months in comparison with other sectors of the economy. Data implied that US consumers spent more both in retail stores and online shops. Construction sales also registered an increase, while consumer expenses at gas stations dropped by 0.2%, despite the higher oil prices. Retail Sales ex Autos increased by the rate of 0.3% in May on a monthly basis, in line with projections, while the indicator declined by 0.1% during the preceding month.

The dollar crumbled against the Japanese yen earlier today as concerns over a possible exit to US central banks stimulus program triggered a broad sell-off in risk assets and the US dollar. Earlier this week Bank of Japan disappointed investors expectations by not taking measures to ease volatility in the government bond market.

Since Bank of Japan abstained from action and expectations grew that the Federal Reserve Bank will begin to unwind its asset purchases, safe haven demand for the yen was bolstered.

Market sentiment was also influenced after the World Bank revised down its forecast for global growth this year to 2.2% from 2.4% at the beginning of the year.

The dollar recovered from 3.5-month lows against the euro, with EUR/USD pair down by 0.12% to 1.3322.