Forex - Dollar gains on improving jobless claims data

The U.S. dollar firmed against most major currencies on Thursday after official data revealed far less individuals filed for unemployment assistance last week than expected.

The report allayed fears that the U.S. economy may be hitting a soft patch and prompt the Federal Reserve to keep monetary stimulus programs in place for longer.

Stimulus tools, such as the Fed's monthly USD85 billion bond-buying program, weaken the greenback to spur recovery. 

In U.S. trading on Thursday, EUR/USD was down 0.94% at 1.3030.

The Department of Labor reported earlier that the number of individuals filing for initial jobless claims in the U.S. last week fell by 4,000 to 323,000, defying expectations for an increase of 8,000 to 335,000.

The news sparked demand for the dollar by fueling sentiments the Fed may closer to winding down dollar-weakening stimulus programs.

Last week, the Bureau of Labor Statistics reported that U.S. economy added 165,000 nonfarm payrolls in April, up from 138,000 in March, whose figure was revised up from 88,000.

April's figures far outpaced analysts' forecasts for a 145,000 figure.

Falling stock prices also bolstered the dollar's appeal.

The greenback, meanwhile, was up against the pound, with GBP/USDtrading down 0.63% at 1.5438.

In the U.K., the Bank of England left interest rates unchanged at a record low 0.5% and maintained the size of its asset purchase program at GBP375 billion.

Industrial output figures out of the U.K. curbed the pound's losses.

The Office for National Statistics said industrial production in the U.K. rose 0.7% in March, beating expectations for a 0.2% increase, after rising by a downwardly revised 0.9% in February.

Industrial output contracted by 1.4% compared to a year earlier, though the figure was better than expectations for a 2% contraction, mainly as unseasonably cold winter weather boosted electricity demand.

The ONS said U.K. manufacturing production rose by 1.1% in March, beating expectations for a 0.3% increase.

The dollar was up against the yen, with USD/JPY up 1.60% at 100.58, and up against the Swiss franc, with USD/CHF trading up 1.40% at 0.9486.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.56% at 1.0090, AUD/USD down 1.19% at 1.0050 and NZD/USD trading down 0.53% at 0.8358.

Official data out of Australia revealed the economy added 50,100 jobs in April, far more than the expected 12,000 increase, while the unemployment rate ticked down to 5.5%.

Elsewhere, the number of individuals employed in New Zealand rose by 1.7% in the first quarter, beating expectations for a 0.8% increase. The unemployment rate fell to a three-year low of 6.2% from 6.9% in the fourth quarter.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 1.08% at 82.87.