The euro was up more than 0.5 percent on Thursday reaching $1.1415 against the US currency while the European stock markets hit the red zone, while the yields rose.
Investors are wary about the discouraging US data in April as “harsh weather conditions” are concerned to be no longer seen as the key driver for weak economic data. This, in turn would postpone a Fed rate hike.
Fed officials hint an upcoming rate hike in June as long as the economic data picks up, however markets are not convinced as current data has not been so pleasant.
According to recent US data, the number of Americans filing new claims for unemployment benefits unexpectedly fell last week to 264,000, near to a 15 year low, which was reached two weeks ago.
Also, in a separate report, the producer price index (PPI) for final demand fell 0.4 percent in April, declining for the third time this year. On annual basis, PPI fell 1.3 percent, marking the biggest year-on-year decline since 2010.
As the value of the US dollar depreciates, oil markets have headed towards recovery in terms of supplies.
US crude futures fell 37 cents to $60.14 a barrel, while Brent was down by 25 cents to $66.56.
The US-German 10-year yield spread plunged to a three-month low in April to 152 basis points while the yield spread gained value against the dollar over 190 basis points in March. As a result, the US dollar fell to a four month low to 93.175 against a basket of six currencies.
The 10-year Treasury yield cooled from Wednesday’s five-month closing high of 2.28 percent thus, maintaining its strong growth.
The leading European shares FTSEuroFirst 300 index was also down by 0.4 percent at 1,563.16 points in the earlier European trade.