Record Surge In U.S. Jobless Claims Intensifies Dollar Sell-off
March 26 2020 - 7:06AM
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The U.S. dollar lost ground against its major counterparts in
early New York deals on Thursday, as first-time claims for
unemployment benefits soared to an all-time high last week amid the
Covid-19 pandemic shut down in large parts of the U.S. economy.
Data from the Labor Department showed that initial jobless
claims skyrocketed to 3,283,000 in the week ended March 21, an
increase of 3,001,000 from the previous week's revised level of
282,000.
Economists had expected jobless claims to spike to about 1.5
million from the 281,000 originally reported for the previous
week.
With the record-breaking increase, the number of seasonally
adjusted initial claims reached the highest level in the history of
the seasonally adjusted series.
The grim data has offset optimism over the Senate approval of $2
trillion fiscal stimulus package to mitigate the economic effects
of the virus.
The bill now heads to the Democrat-controlled House for final
approval on Friday.
In other economic releases, data from the Commerce Department
showed that the increase in U.S. gross domestic product in the
fourth quarter was unrevised from the previous estimate.
The Commerce Department said GDP increased by 2.1 percent in the
fourth quarter, unchanged from the estimate provided last month and
in line with economist estimates.
The greenback was down against the euro at an 8-day low of
1.0990. The pair had finished Wednesday's deals at 1.0882. Further
fall in the greenback may face support around the 1.12 area.
Survey data from market research group GfK showed that German
consumer confidence is set to decline sharply to the lowest in more
than a decade in April as the increase in the number of coronavirus
infection cases and the accompanying measures made consumers to
take cautious approach.
The forward-looking consumer confidence index fell to 2.7 from
8.3 in March. The score was forecast to fall moderately to 7.7 from
March's initially estimated value of 9.8.
Having climbed to 111.29 at 5:15 pm ET, the greenback slipped to
a 6-day low of 109.38 against the yen. At Wednesday's close, the
pair was worth 111.20. Next likely support for the greenback is
found around the 108.00 level.
Data from the Bank of Japan showed that Japan producer prices
rose 2.1 percent on year in February.
That was shy of expectations for an annual increase of 2.2
percent and down from 2.3 percent in January.
The greenback fell to a 1-week low of 0.9676 against the franc,
after rising to 0.9775 at 6:30 pm ET. Should the greenback falls
further, 0.95 is likely seen as its next support level.
The greenback dropped to an 8-day low of 1.2037 against the
pound, from a high of 1.1777 seen at 7:15 pm ET. The greenback is
seen finding support around the 1.22 mark.
Data from the Office for National Statistics showed that UK
retail sales declined unexpectedly in February.
Retail sales dropped 0.3 percent on a monthly basis in February,
in contrast to a 1.1 percent rise in January and confounding
expectations for an increase of 0.2 percent.
The greenback touched 1.4066 against the loonie, its lowest
level since March 17. The currency is likely to face support around
the 1.33 region, if it falls again.
After rising to a 2-day high of 0.5777 in the previous session,
the greenback moved down against the kiwi, reaching an 8-day low of
0.5933. The greenback may challenge support around the 0.64
area.
The greenback reached as low as 0.6057 against the aussie,
following a 2-day jump to 0.5870 at 10:00 pm ET. Immediate support
for the dollar is seen near the 0.68 level.
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