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The weekly US unemployment claims rose to 360K. They were expected to stand at 342K, almost unchanged from last week’s 344K (revised up from 343K). This figure is more and more important as employment data is the key for tapering QE. Also continuing claims disappointed with a rise from 2.953 (revised up from 2.933) to 2.977 million.

EUR/USD traded around 1.3050 before the publication, off the swing highs of over 1.32, but above the pre-Bernanke levels. Is is now climbing a bit. USD/JPY was around 99.20 and sees an initial dip. After the initial drop, the dollar is actually stronger, with EUR/USD sliding to 1.3043 and USD/JPY rising to 99.30. This isn’t exactly the expected reaction. Does the market believe that the holiday distorted the data?

Import prices unexpectedly dropped by 0.2% instead of rising by 0.1%. This provides evidence that deflation is a threat.

The markets are still shocked by Bernanke and meeting minutes. a somewhat cautious meeting minutes from the FOMC + dovish comments from Bernanke about the US economy + low liquidity in the Asian session saw moves of hundreds of pips across the board.

EUR/USD went from under 1.29 to 1.32 before falling to current levels. GBP/USD shot back above 1.50 all the way to 1.52 before falling. It is under 1.51 now.

Further reading:  Dollar scenarios for EUR/USD after the FOMC meeting minutes, Bernanke