Greenback Broadly Stronger Amid 5-Year New Low For Claims, USDJPY Above 100 - 10.5.2013

The US dollar advancement triggered as the Jobless Claims reported for previous week were 323K, surprisingly less than expected at 333K and lower than 327K claims two weeks ago. The US dollar continued strengthening in almost all Thursday session against the most of its peers. The US dollar Index found support at 81.69 on Wednesday and yesterday was dynamically pushed to higher ground due to more than five years low of number of persons claiming unemployment benefits, reaching as high as 82.81.

The greenback against the Japanese Yen had an exceptional performance managing to rise above previous major cap and psychologically important level at 100. The currency pair boosted from yesterday support at 98.86 to upside hurdle at 101.25. As soon as the pair increased above 99.90, accumulated buy orders around 100 were triggered driving the pair higher, we expect USDJPY to move even higher but before that some profit taking may hold it in the immediate term.

In addition recent stronger than expected data like employment for Aussie, last week’s NFP, Central Bank’s tendency towards looser monetary policies as well as in a report earlier today that Japanese Trade Deficit narrowed more than anticipated, increase risk appetite. Therefore, investors are abandoning Yen for higher yielding currencies, the Euro versus the Yen advanced to a new high since January 2010 at 131.76.

Lastly, the Bank of England decided to maintain unchanged its monetary policy yesterday with key rate left at 0.50% and asset purchases facility size at 375B as it was expected. Although UK Manufacturing Production and Industrial Production were better than expected for March, the GBPUSD collapsed from 1.5589 to 1.5434 on US dollar power due to US claims.