Dollar Skids as China Pushed for Currency Reforms

The U.S. dollar suffered heavily against the Euro and Pounds Sterling Thursday as the Chinese pushed for a reformed international currency system.  

The proposal was made at the G8 summit meeting in Italy and threatened the status of the U.S. dollar as a safe haven currency.  

Meanwhile, the draft declaration on the international monetary system failed to mention the status of the U.S. dollar.

China Pushing Heavily for International Currency Reforms   

Dai Bingguo, a state councilor of China, was quoted by Chinese officials saying that there is an urgent to improve the international monetary system.  The official urged the G8 summit to look into deeper international currency system reforms.  

The Chinese also wants to enhance the reserve currency and regulation so as to maintain the relative stability of currency exchanges in the international money market.  The proposal seeks to diversify and promote rationality in the international currency system.  

Backlash for the U.S. Dollar

Consequently, the U.S. dollar fell to its weekly low against the Euro sliding to 1.4071 from its three-week high of 1.3832.  The greenback also slid against the onslaught of the Pounds as it fell to 1.6339.  This wiped out the one week gain of the dollar as it slid further from its monthly high of 1.5982.  

On the other hand, the U.S. dollar remained steady against the Japanese Yen at 93 veering farther away from its five-month low of 91.79.  

Modest Economic Figures Released

At the domestic front, the United States reported significant decrease of unemployment benefits claims of first time claimants.  The data was released by the Labor Department on Thursday.  

For the first time since January of 2009, the jobless claims in the U.S. fell below 600,000.  The jobs data showed unemployment claims at 565,000 from the previous figure of 617,000.  

Wholesale Trade Shows Signs of Easing

Meanwhile, the wholesale trade also posted signs of good news as data showed that current inventories fell by less than the experts expected.  The data was released by the Commerce Department showing figures for the month of May.  Furthermore, the report also showed modest growth in wholesale sales.  

According to the data, wholesale inventories in May fell 0.8 percent following the 1.3 percent decreased revised figures of April.  Many economists believed that the wholesale data and inventories will fall by 1.0 percent following the trend of the previous month where wholesale data fell by 1.4 percent as originally reported