The U.S. dollar is trading lower against all of the major currencies this morning but a better than expected jobless claims report helped the greenback recover part of its earlier losses. It took a while for FX traders to react but they are relieved that claims did not remain above 380K for the second week in the row.

First time jobless claims fell to 346K from 388K, which was lower than the market’s 360K forecast. While this improvement eases some concerns about a further deterioration in the labor market, the Labor Department attributed the plunge to unwinding of seasonal swings. The more stable 4 week moving average ticked up only slightly to 358K from 355K while continuing claims dropped to 3.079 million from an upwardly revised 3.09 million.

After last week’s sharp decline in non-farm payrolls, incoming economic reports such as these are more important than usual because they will determine whether Federal Reserve officials will push back their date for tapering asset purchases. The 0.5% decline in import prices also gives the central bank a reason to delay a reduction in asset purchases. Of course, this week nothing is more important than Friday’s retail sales numbers and unfortunately economists are looking for spending to stagnate after jumping 1.1% the previous month.

Meanwhile the EUR/USD is making a second attempt to break above a key level. The 50-day SMA and second standard deviation Bollinger Band at 1.3130 capped the currency pair’s gains on Wednesday and continued to do so today. The 100-day SMA at 1.3148-1.3150 is the real level that EUR/USD needs to clear to open up for a move up to 1.33.

USD/JPY on the other hand continues to consolidate below 100. The break through 100 was never expected to be an easy battle but when the barrier is clear, there could be a surge upwards. Finally, the best performing currency today is the New Zealand dollar, which rose to a fresh 18 month high against the greenback. The upward momentum in the NZD/USD is so strong that weaker New Zealand Business PMI and Australian employment numbers failed to hold back the currency.

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