On Thursday the Dow Jones Index of shares climbed 0.5 percent and the Standard & Poor’s Index rose 0.2 percent. The Treasury Department said yesterday that the U.S. federal government ran $65 billion into the red in November, up 14 percent from the same period last year when the deficit was only $57 billion. Economists had expected a $68 billion deficit for November. The current fiscal year-to-date deficit stood at $201 billion. Furthermore data showed yesterday that the number of Americans filing for unemployment benefits increased to a five- month high last week, but this likely does not signal a deterioration in the labor market as the underlying trend remained consistent with tithening conditions. Initial jobless claims for state unemployment benefits rose 13,000 to a seasonally adjusted 282,000 for the past week, which is the highest level since early July. Claims have now been below the 300,000 threshold for 40 straight weeks., which is the longest stretch since the early 1970s. Besides that other data yesterday showed that cheaper crude oil and a strong USD are keeping imported inflation pressures subdued in the pat month. The EUR/USD depreciated to 1.0937 and the USD/JPY gained to 121.90. The EUR/JPY traded at 133.30. Bank of Japan Governor Kuroda said inflation will rebound toward his 2 percent target next year once the effect if lower oil prices fades from the equation.
Yesterday the Bank of England left borrowing costs at a record-low 0.5 percent in its last decision this year. Released minutes showed that the Committee voted 8-1 to keep the status quo. Officials said low oil prices and subdued wage growth would keep a lid on inflation.The GBP/USD was nearly unchanged at 1.5175 and the EUR/GBP dropped 0.5 percent to 0.7212.