The dollar is losing ground against its major rivals Thursday afternoon. The currency was hard hit following reports that U.K. and the European Union have reached a tentative deal that would grant U.K. companies continued approach to European markets after Brexit.
The U.K. and EU negotiators entered into a tentative deal on all aspects of a future partnership on services, as well as the exchange of data, the Times of London reported.
A day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report on Thursday showing a slight drop in first-time claims for U.S. unemployment benefits in the week ended October 27th.
The report said initial jobless claims edged down to 214,000, a decrease of 2,000 from the previous week’s revised level of 216,000. Economists had expected jobless claims to come in unchanged compared to the 215,000 originally reported for the previous week.
Labor productivity growth in the U.S. slowed in the third quarter, according to a report released by the Labor Department on Thursday, with the report also showing a rebound in unit labor costs.
The Labor Department said labor productivity climbed by 2.2 percent in the third quarter after jumping by 3.0 percent in the second quarter. Economists had expected productivity to increase by about 2.0 percent.
Meanwhile, the report said unit labor costs surged up by 1.2 percent in the third quarter after slumping by 1.0 percent in the second quarter. The rebound in labor costs matched economist estimates.
A report released by the Institute for Supply Management on Thursday showed a bigger than expected slowdown in the pace of growth in U.S. manufacturing activity in the month of October.
The ISM said its purchasing managers index dropped to 57.7 in October from 59.8 in September, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to edge down to 59.0.
Construction spending in the U.S. came in virtually unchanged in the month of September, according to a report released by the Commerce Department on Thursday.
The Commerce Department said construction spending in September was estimated at an annual rate of $1.33 trillion, nearly the same as the revised August estimate. Economists had expected spending to inch up by 0.1 percent.
The dollar has fallen to around $1.14 against the Euro Thursday afternoon, after reaching a 2 1/2 month high of around $1.13 yesterday.
Bank of England policymakers unanimously decided to maintain the monetary policy stance at the meeting, but signaled faster rate hikes than the current market expectations over Brexit uncertainties.
Although the impact of Brexit cannot be determined in advance, the Monetary Policy Committee vowed to respond to any material change in the outlook.
The buck has dropped to over a 1-week low of $1.3015 against the pound sterling Thursday afternoon, from an early high of $1.2764.
The UK manufacturing sector grew at the slowest pace in more than two years in October, survey results from IHS Markit and Chartered Institute of Procurement & Supply showed Thursday. The manufacturing Purchasing Managers’ Index fell to a 27-month low of 51.1 in October from revised 53.6 in September. The score was forecast to drop moderately to 53.0.
The greenback reached a high of Y113 against the Japanese Yen Thursday morning, but has since eased back to around Y112.695.
The manufacturing sector in Japan continued to expand in October, and at a faster rate, the latest survey from Nikkei revealed on Thursday with a four-month high manufacturing PMI score of 52.5. That’s up from 52.5 in September, and it moves farther above the boom-or-bust line of 50 that separates expansion from contraction.