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FOREX-U.S. dollar pares post-data losses; Aussie sinks

Curtis Skinner
Thursday, 16 Jan 2014 | 3:52 PM ET

* US dollar pares some losses

* US continuing claims rise; underlying inflation benign

* Aussie dollar falls to lowest since Aug 2010

NEW YORK, Jan 16 (Reuters) - The dollar pared some of its early losses on Thursday, coming under pressure after data showed a jump in U.S. continuing jobless claims, while the Australian dollar fell to lows not seen in more than three years.

The dollar index hit a session low of 80.772 in the morning following the data. It was last down 0.13 percent to 80.923, but analysts said the uptrend was still intact for the greenback.

In the United States, continuing jobless claims rose 174,000 to 3.030 million in the week ending Jan. 4, the highest weekly figure since July. Other data showed core consumer inflation remained muted, even though overall prices rose thanks to a spike in gasoline.

"The dollar's fall may reflect bigger-than-expected continuing claims and some could see that as an argument for the labor market being not too strong," said Shahab Jalinoos, currency strategist at UBS in Stamford, Connecticut.

"The intraday ranges are fairly muted and it comes after an overnight session where the dollar was actually quite strong," Jalinoos said.

The Australian dollar tumbled against the U.S. dollar to its lowest since August 2010 after a surprise fall in Australian employment that raised the possibility of another cut in interest rates from the Reserve Bank of Australia.

The Aussie dollar fell as low as US$0.8777, and was last down 1.12 percent at US$0.08814, continuing a weeklong trend of weakness.

Investors reacted by reviving talk of another cut in interest rates from the Reserve Bank of Australia, which has been signaling it would rather not ease again from the current record low of 2.5 percent.

"People were already selling into the bounce before we got to today, and I think today's numbers just pushed people in the direction that they were already going," said Marc Chandler, director of currency strategy at Brown Brothers Harriman.

Computer-driven hedge funds, meanwhile, have latched onto the currency's slide, traders said.

Richard Perry, analyst at Hantec Markets, said that while technical factors suggest there could be a small bounce in the Aussie, it could meet resistance between $0.8820 and $0.8863.

"I'd be using that technical rally as a chance to sell. It does not look good," he said.

The euro was last up 0.08 percent to $1.3614, while the dollar slid 0.21 percent to 104.33 yen, according to Reuters data.