Dollar, shares gain as PMIs point to world growth

Thu Aug 22, 2013 10:31am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Herbert Lash

NEW YORK (Reuters) - The dollar rose and global equity markets gained on Thursday after business surveys from around the world revealed a global economy in expansion, helping cement expectations the Federal Reserve will trim its bond-buying program in September.

Purchasing managers surveys showed better-than-expected growth in the euro zone, a rebound in China's vast manufacturing sector and U.S. manufacturing activity rising to a five-month high in August.

Data from the Labor Department showing the number of Americans filing new claims for jobless benefits held near a six-year low last week added to signs the U.S. economy is starting to find firmer footing.

The dollar trimmed gains after initial claims for state unemployment benefits climbed 13,000 to 336,000, just above the level expected by economists in a Reuters poll.

But the four-week moving average for claims, a better gauge of labor market trends, fell to its lowest level since November 2007, suggesting the U.S. economy was growing enough to fuel steady improvement in the jobs market.

The report did not change the market's view that the Fed will begin to trim, or taper, its monetary stimulus next month.

"The Fed tapering theme continues. Yesterday's Fed minutes reinforced expectations that the Fed will taper its quantitative easing program in September and today's jobless claims didn't really change that," said Greg Moore, currency strategist at TD Securities in Toronto.

"The jobless claims rose but they were not really that far off from the consensus forecast."   Continued...

Traders work on the floor of the New York Stock Exchange August 21, 2013. REUTERS/Brendan McDermid