Investing.com – The dollar firmed against the euro on Thursday after official data revealed the number of individuals filing for unemployment assistance for the first time in the U.S. last week dropped to levels not seen in six years.
Better-than-expected revised U.S. growth rates fueled dollar demand as well.
In U.S. trading on Thursday, EUR/USD was down 0.88% at 1.3221, up from a session low of 1.3219 and off from a high of 1.3343.
The pair was likely to find support at 1.3205, the low from Aug. 15, and resistance at 1.3398, Wednesday’s high.
The Commerce Department reported earlier that the U.S. gross domestic product expanded at an annual rate of 2.5% in the second quarter, above expectations for 2.2% growth and up from a preliminary estimate of 1.7%.
Separately, the Department of Labor reported that the number of individuals who filed for initial jobless claims fell to its lowest level since October of 2007 last week.
Initial jobless claims in the week ending Aug. 23 fell by 6,000 to 331,000, outpacing consensus forecasts for a decline of 5,000.
Thursday’s data rekindled expectations that the Federal Reserve may begin to taper its USD85 billion monthly bond-buying program in September as opposed to later in the year.
Monetary stimulus tools such as Federal Reserve asset purchases weaken the dollar by driving down interest rates, and talk of their dismantling strengthens the greenback.
The dollar also saw continued safe-haven demand from investors who remained wary over the possibility of a U.S.-led military strike against Syria’s government following the alleged use of chemical weapons.
The euro, meanwhile, saw pressure on concerns that Greece may require a third bailout package in 2014.
Also weakening the single currency, Germany reported that the number of people out of work climbed by 7,000 to 2.95 million, defying market calls for a decline of 5,000.
The country’s unemployment rate remained unchanged at 6.8%
The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP trading down 0.65% at 0.8536 and EUR/JPY trading down 0.03% at 130.21.
On Friday, the euro zone is to publish preliminary data on consumer price inflation, in addition to data on the unemployment rate.
The U.S. is to round up the week with a report on manufacturing activity in Chicago and revised data from the University of Michigan on consumer sentiment as well as reports on personal income and personal spending.