• Weekly Report Shows 10pc Increase
• USD Holds Gains Vs. EUR
• Gold Suffers On Lacklustre Data

The number of Americans seeking unemployment benefits surged unexpectedly by almost 10 percent last week, following three weeks of declines.

America’s Labour Department reported 386,000 initial jobless claims were filed last week; the largest weekly gain since April 2011.  But economists are reporting difficulty analysing the recent figures which, it is thought, have been affected by seasonal distortions.

Summer layoffs in the automotive industry are thought to have rendered July’s data particularly volatile, with analysts preferring to study averages for a clearer picture of the data. The four-week moving average fell by 1,500 to 375,500.

The data serves to solidify Fed Chairman Ben Bernanke’s downbeat assessment of the nation’s economy made earlier this week. With hiring across most regions described as ‘tepid’ by the Fed. and other indicators such as retail sales slowing, the U.S. recovery continues to show signs of faltering.

Following the release of the data, the U.S. dollar held on to mild losses against the euro on live forex charts, with EUR/USD up 0.06 percent to 1.2291.

Meanwhile, gold futures dropped from session highs after the release of the disappointing data, as the dollar moved to retrace earlier losses. Gold has been moving, largely, in line with market expectation that the Fed will engage in a further round of easing to support the stumbling recovery. This further round of downbeat data will do little to support the precious commodity.

Speaking at the half-yearly testimony to Congress, the Fed chairman admitted that the central bank were open to further easing measures. He stopped short of hinting about any timescale or identifying that a strategy would be implemented with any kind of certainty, disappointing gold bugs who had begun pricing in a solid hint of further accommodative action.

Robin Harding, US economics editor for the Financial Times, said: “Mr Bernanke did not go beyond the Fed’s last statement that “it is prepared to take further action as appropriate to promote a stronger economic recovery”…

“The Fed chairman has steadily ramped up his rhetoric on fiscal policy with each successive visit to Capitol Hill”, Harding added. “But there is still little sign that Congress is willing to compromise before the November election, even in order to boost growth.”

Sarah Cox, Markets Writer. ForexSpace.com.