Dollar Declines After Record Drop In U.S. GDP
The U.S. dollar slipped against its major opponents in the
European session on Thursday, after a data showed that the economy
contracted at its fastest pace on record in the second quarter as
business activity came to a halt during the pandemic lockdown.
Data from the Commerce Department showed a record contraction in
U.S. economic activity in the second quarter.
The report said real gross domestic product plummeted at an
annual rate of 32.9 percent in the second quarter following a 5.0
percent slump in the first quarter.
Data from the Labor Department showed that first-time claims for
U.S. unemployment benefits increased for the second straight week
in the week ended July 25th, although claims rose by much less than
The report said initial jobless claims edged up to 1.434
million, an increase of 12,000 from the previous week's revised
level of 1,422,000.
Lack of progress in talks between the White House and Congress
over a new coronavirus aid package was also weighing on
President Donald Trump said on Wednesday that his administration
and Democrats in Congress were still "far apart" on a new
coronavirus relief bill.
The greenback pulled back to 104.91 against the yen, from a
2-day high of 105.29 seen at 1:15 am ET. The greenback may face
support around the 100.00 region, if it weakens again.
Data from the Ministry of Economy, Trade and Industry showed
that Japan retail sales fell 1.2 percent on year in June.
That beat forecasts for a decline of 6.5 percent following the
12.3 percent drop in May.
The greenback dipped to 1.3044 against the pound, a level unseen
since March 10. The greenback is seen challenging support around
the 1.33 mark.
After climbing to 1.1731 at 5:00 am ET, the greenback weakened
to 1.1796 against the euro. Next near term support for the
greenback is seen around the 1.20 region.
Survey data from European Commission showed that Eurozone
economic confidence improved to a four-month high in July as
sentiment in industrial and service sectors strengthened amid the
relaxation of coronavirus containment measures.
The economic sentiment index climbed to 82.3 in July from 75.8
in the previous month. The score was forecast to rise to 81.0.
The greenback fell back to 0.9117 against the franc, a pip short
of more than a 5-year low of 0.9116 it logged in the Asian session.
The currency may possibly face support around the 0.90 mark.
In contrast, the greenback held steady against the aussie and
the kiwi, after rising to a 2-day high of 0.7129 and a 6-day high
of 1.3433, respectively early in the trading session. At
yesterday's close, the currency was worth 0.7187 against the aussie
and 0.6668 versus the kiwi.
The greenback appreciated to a 6-day high of 1.3433 against the
loonie, bouncing off from a low of 1.3333 set in the Asian session.
Should the greenback gains further, 1.38 is possibly seen as its
next resistance level.
AUD vs US Dollar (FX:AUDUSD)
From Jul 2020 to Aug 2020
AUD vs US Dollar (FX:AUDUSD)
From Aug 2019 to Aug 2020