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More positive news from the US job market: weekly jobless claims dropped to 395K, better than 400K that was expected. While this isn’t a very big difference, it is still the best since April. This releases the hot air out of the franc and the yen.

USD/JPY is up to 76.80, after trading lower earlier in the day. USD/CHF, extends its gains and is now at 0.7534. The low chances of QE3 are now lower.

A few weeks ago, there was a report of a drop to 398K, but it was later revised to the upside. The round number of 400K is of psychological importance. If claims stabilize below this number, it could be reflected in a drop in the unemployment rate.

This report joins the latest Non-Farm Payrolls report for July, published this Friday – it has shown a gain of 117K jobs and a drop in the unemployment rate to 9.1%. The real unemployment rate also ticked down, but it is still extremely painful.

The aren’t signs of healthy growth, but they also show that not all is lost.

The yen and the franc are the most sensitive currencies to US releases. The drop under 400K helped them lose some of their hot air. The recent interventions had a wild, yet short lived effect.

Ben Bernanke pledged to keep low rates unchanged at least until mid 2013, but offered no hints of QE3. Some analysts are still expecting him to do so in the JAckson Hole Symposium on August 26th, but I think the chances are quite low, especially as inflation is high and deflation risks are low.

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