The dollar rose versus most major currencies and pared losses against the Japanese yen Thursday, after U.S. data on jobless claims painted a relatively rosy picture and stood in contrast to weak economic reports out of China and Europe. Also weighing on the euro are renewed concerns about Portugal and Spain’s fiscal challenges.
The ICE dollar index DXY +0.31% , which measures the greenback’s performance against a basket of six other currencies, rose to 79.890 from 79.654 in North American trade late Wednesday.
The euro EURUSD -0.40% gave up gains scored in the Asian session to fall to $1.3158, off from $1.3205 on Wednesday.
Versus the yen, the shared currencyUSDJPY -0.84% declined to ¥109.08 from ¥110.27.
The dollar retained gains after a government report showed first-time claims for state unemployment benefits declined a little more in the latest week than analysts had predicted.
Supporting the greenback earlier, the preliminary Markit composite purchasing managers’ index for the 17-nation euro zone unexpectedly fell in March.
“The key question for global markets is whether the U.S. can dance to its own drummer, in the midst of weaker global numbers,” said Alan Ruskin, global head of G-10 foreign-exchange strategy at Deutsche Bank.
The weak overseas data also are keeping U.S. Treasury yields from continuing a march higher, which poses a big threat to the U.S. equity market, he said.
“So ironically, the latest international news may have added a degree of risk protection from a bond blow-out,” he said.
At the same time, European bond yields rose, with yields Italian 10-year notes IT:10YR_ITA +2.08% topping 5% as Spanish 10-year yields ES:10YR_ESP +2.18% reclaimed their highest levels since early January.
Portugal’s bond yields also rose as public transport services across the country came to a halt in a nationwide strike to demonstrate that the nation can’t take any further austerity.
“Portugal is on strike against austerity today and Spain is garnering a lot of attention as growth remains weak and concerns remain about its banking sector,” said Kathleen Brooks, research director at Forex.com.
This is especially so as the European Central Bank seems disinclined to hold another unlimited long-term refinancing operation, or LTRO, she said.
A move in Spanish yields above their recent range “could ignite concerns about Europe’s fourth largest economy as it tries to sell 24 billion euros of debt next month,” Brooks noted.