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Dollar Soars To Fresh Two-decade High

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The U.S. dollar firmed against major counterparts and rose to a fresh two-decade high in the process on Thursday, with prospects of sharper rate hikes and tighter policies buoying up the currency’s safe-haven appeal.

A report released by the Labor Department showed the annual rate of producer price growth slowed by less than expected in the month of April.

The report showed the annual rate of growth in producer prices slowed to 11% in April from a record high 11.5% in March, although economists had expected a bigger slowdown to 10.7%.

Core producer prices, which exclude prices for food, energy and trade services, were up by 6.9% compared to a year ago, reflecting a modest slowdown from the 7.1% spike seen in the previous month.

A separate report released by the Labor Department unexpectedly showed a slight increase in first-time claims for U.S. unemployment benefits in the week ended May 7th.

The Labor Department said initial jobless claims crept up to 203,000, an increase of 1,000 from the previous week’s revised level of 202,000. Economists had expected jobless claims to dip to 195,000 from the 200,000 originally reported for the previous week.

The dollar index soared to 104.93 before easing a bit and paring some gains. It was last seen hovering around 104.80, up more than 0.9% from the previous close.

Against the Euro, the dollar firmed to $1.0379 from $1.0515.

The dollar is trading at $1.2197 against Pound Sterling, strengthening from $1.2251.

Against the Japanese currency, the dollar is weak, fetching 128.34 yen, compared with 129.98 yen on Wednesday.

The dollar is stronger against the Aussie at 0.6859, firming from 0.6938. Against Swiss franc, the dollar has weakened by more than 1%, trading at CHF 0.9961.

The Loonie has weakened to 1.3044 a dollar, drifting from 1.2994, weighed down by weak crude oil prices.

The material has been provided by InstaForex Company – www.instaforex.com

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