Investing.com - Solid personal spending offset a disappointing U.S. weekly jobless claims report and erased the dollar''s earlier losses against the euro on Thursday, as many investors jumped to the sidelines to await the release of Friday''s April jobs report.
In U.S. trading, EUR/USD was down 0.01% at 1.3865, up from a session low of 1.3863 and off a high of 1.3889.
The pair was likely to find support at 1.3778, Wednesday''s low, and resistance at 1.3905, the high from April 11.
The Department of Labor reported earlier that the number of individuals filing for initial jobless benefits last week rose by 14,000 to 344,000 from the previous week’s upwardly revised total of 330,000.
Analysts had expected jobless claims to fall by 11,000 to 319,000.
Offsetting the disappointing jobless claims figures, the Commerce Department reported earlier that U.S. personal spending rose 0.9% in March from an upwardly revised 0.5% the previous month, beating expectations of 0.6%.
Consumer spending is the single biggest component of U.S. economic growth, accounting for as much as two-thirds of economic activity.
The report added that personal income rose 0.5%, beating expectations for a 0.4% increase.
Separately, the Institute for Supply Management said its manufacturing PMI rose to 54.9 last month from 53.7 in March, outpacing expectations for a 54.3 reading.
The reports came one day after data showed that the U.S. economy expanded at an annual rate of just 0.1% in the first quarter, well below forecasts for an expansion of 1.2%, though markets attributed the poor showing to rough winter weather that disrupted commerce earlier this year.
Despite the sharp slowdown in growth the Federal Reserve said Wednesday it would reduce its monthly bond purchases to $45 billion from $55 billion, as despite a sluggish first quarter, the economy has been showing signs of gaining steam in recent weeks.
Investors were looking ahead to Friday’s April nonfarm payrolls report, which was expected to show that the recovery in the labor market was continuing.
The euro was down against the pound, with EUR/GBP down 0.18% to 0.8205, and up against the yen, with EUR/JPY up 0.06% at 141.85.
On Friday, the pair will move on the April jobs report.
Elsewhere, the U.S. is to issue a separate report on factory orders.
The euro zone is to produce data on the unemployment rate, while Spain and Italy are to release reports on manufacturing activity.