The dollar held on to losses in thin Christmas Eve trading on Thursday, after data showed the number of people who filed for unemployment assistance in the U.S. fell more than expected last week.
Trading volumes are expected to remain light, with much of the Western world already shuttered for the Christmas and year-end holidays.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefitsdecreased by 5,000 last week to 267,000. Analysts expected jobless claims to fall by 2,000 to 270,000 from the previous week’s total of 272,000. First-time jobless claims have held below the 300,000-level for 41 consecutive weeks, which is usually associated with a firming labor market.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.23% at 98.15 during U.S. morning hours. The index, which has fallen back to levels seen before the Federal Reserve raised interest rates on December 17, remains well off last week’s two-week high of 99.33.
With the first U.S. rate hike since 2006 out of the way, the focus is now on the pace of future rate increases. The Fed, from its forecasts, is anticipating four rate hikes next year. However, the Fed funds futures currently suggests there will be just two rate increases, in June and December.
Trading volumes are expected to remain light as many traders already closed books before the end of the year, reducing liquidity in the market and increasing volatility. U.S. markets close early Thursday, Christmas Eve, and are shut Friday for Christmas Day.