The dollar fell against the euro and the yen after the Labor Department reported that initial jobless claims rose unexpectedly last week. This news fueled concerns about the strength of the U.S. economic recovery.

The number of people filing for unemployment benefits increased by 36,000 to 480,000, exceeding economists’ forecasts. The rise in claims suggests that the labor market remains fragile, potentially slowing down overall economic growth.

Currency analysts noted that the dollar’s decline reflects a shift in investor sentiment. The weaker-than-expected jobs data has led some to believe that the Federal Reserve may maintain its accommodative monetary policy for longer than previously anticipated.

The euro gained against the dollar, while the yen also strengthened. Other currencies, including the British pound and the Australian dollar, also saw gains against the U.S. currency.

The dollar’s weakness could provide some support to U.S. exporters, making their products more competitive in international markets. However, it could also lead to higher import prices, potentially contributing to inflation.

Market participants will be closely watching upcoming economic data releases, including the monthly jobs report, for further clues about the health of the U.S. economy and the future direction of the dollar.