The dollar rose against the yen and the British pound Thursday

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The dollar rose against the yen and the British pound Thursday, buoyed by data showing a sharp decline in U.S. weekly jobless claims.

The dollar climbed 0.3% versus the yen, to ¥101.77, its fifth consecutive rise and the highest level in one week. The pound lost 0.4%, to $1.6986, its sixth straight decline and the lowest level in a month; sterling also dropped below $1.70 for the first time since June 26. The euro was flat at $1.3463.

New applications for unemployment benefits fell to an 8 1/2-year low, decreasing by 19,000 to 284,000 in the week ended July 19. The number of jobless claims was below the average forecast of 305,000 by economists surveyed by The Wall Street Journal.

The data, although regarded as exceptionally volatile at this time of the year, pointed to a U.S. labor market that continued to post solid gains, said Brian Daingerfield, currency strategist at RBS Securities.

China’s gold demand drops

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China’s gold demand fell 19 percent in the first six months of this year as investors bought fewer bars and coins, offsetting increased demand for jewelry, the China Gold Association said.

Consumption in China, which passed India last year as the world’s biggest user, slid to 569.5 metric tons, the Beijing- based association said in a statement today. Demand for bars sank 62 percent, while gold use in jewelry rose 11 percent, according to the statement.

An 8.9 percent price rise this year amid unrest in Ukraine and the Middle East has hurt consumption in China, which is expected to be “more or less the same” on a full-year basis in 2014, Zhang Bingnan, vice-chairman and general secretary at the association, said in an interview in Singapore last month. Demand will rise about 25 percent in the next four years as an increasing population gets wealthier, the London-based World Gold Council said in April.

“China bought too much last year and there’s significant stock built up onshore that will take some time to work through,” Victor Thianpiriya, commodity strategist at Australia & New Zealand Banking Group Ltd., said by phone from Singapore. “Demand was very strong last year and not something people expected to be repeated this year. The investment bar side tends to be more speculative and price sensitive, while jewelry is pretty static.”

Purchases in China accelerated last year to a record 1,176.4 tons, after a 28 percent price slump that was the biggest annual drop in more than three decades. Banks including Goldman Sachs Group Inc. and Morgan Stanley expect gold to extend declines even as holdings in bullion-backed exchange- traded products rebound from the least since 2009.

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