The dollar turned higher Thursday after reports on U.S. jobs and home sales indicated that the economy improved at the end of 2010.
The government’s weekly jobless claims data showed fewer people filing for unemployment benefits, suggesting that hiring will pick up this year. The National Association of Realtors said sales of previously owned homes in December jumped 12.8 percent, the strongest pace in seven months.
The dollar also got a boost from investors seeking safe-haven assets, said Bank of New York Mellon analyst Michael Woolfolk, after China reported an inflation rate of 4.6 percent for December. Rising prices in China have worried investors, who believe that the Chinese government will take more moves to cool inflation, perhaps slowing its economic growth and hitting global trade.
The dollar has traditionally been a refuge when investors worry about the health of the global economy, rising when stocks, commodities and currencies perceived to be riskier sell off.
In midday trading in New York, the euro fell to $1.3447 from $1.3465 late Wednesday. The euro has been rising since late last week, hitting a nearly two-month high Wednesday, because investors have been expecting European leaders to take more aggressive steps to counter Europe’s debt crisis. Recent successful bond auctions in Spain and Portugal reassured investors that the region’s indebted governments could still raise money.
The common currency, used by 17 European countries, remains down about 7 percent since early November, when Ireland’s debt woes grabbed investors’ attention. Ireland last year received emergency financing from the European Union and the International Monetary Fund, as did Greece. Investors worry that Portugal may be next.
In other trading Thursday, the British pound fell to $1.5871 from $1.5990, while the dollar rose to 83 Japanese yen from 82.06 yen.
The dollar edged up to 1.0003 Canadian dollars from 99.60 Canadian cents, its first tick over parity in two weeks. It also popped against the Australian dollar. Both Canada and Australia are big commodity exporters, and their currencies tend to rise and fall in tandem with the prices of oil and other raw materials. Oil prices fell almost 3 percent Thursday.
The dollar also gained to 0.9663 Swiss franc from 0.9550 Swiss franc.
- Associated Press