Improved U.S. Data Increased Demand on the USD

After fears from the U.S. lawmakers failure to reach to an agreement to raise the debt ceiling and cut spending, less than a week before August 2 deadline, spread throughout the markets this morning, weighing down on the USD; the greenback managed to recover all the losses seen during the Asian session after the U.S. released a better than expected jobless claims report.

Jobless claims fell by 24,000 to 398,000 in the week ended in July 23, to fall below the 400,000 level for the first time since early April. This managed to boost confidence in the economy and divert the attention from the debt ceiling saga for a while. Officials will vote again today on a debt-limit increase proposal, therefore caution will persist since a possible default could have catastrophic effects on the financial markets.

Meanwhile the pending home sales rose unexpectedly during June by 2.4% from -2.0% expected. Volatility and demand on safe haven continues to dominate the global financial markets since uncertainties keep sentiment fragile, while contagion fears from Europe continue to drain the euro.

Stocks in the United Statesrose at opening on Thursday, where the Dow Jones Industrial Average was up by nearly 0.26% to trade around 12334.57, while the S&P 500 index rose by nearly 0.37% to trade around 1309.76. European stock indexes were lower before closing on Thursday, where FTSE 100 was down by nearly 0.34% trading at 5836.61 and the DAX was lower by nearly 1.41% to trade around 7150.57.

The U.S. dollar rose back against a basket of major currencies on Thursday, where the U.S. dollar index was trading at 74.25, compared with the lowest of the day at 73.87. The Euro dropped against the Dollar, where the EUR/USD pair is trading at $1.4300, compared with the highest of the day at $1.4400, and the British Pound is almost unchanged against the dollar, where the GBP/USD pair trades at $1.6322, compared with the opening of $1.6328.

Gold prices were little changed on Thursday, where gold traded around $1612.00 an ounce, and crude oil prices rose, where crude oil prices are trading at $97.60 a barrel.