U.S. Dollar Down Awaiting Jobless Claims

The U.S. dollar continued to decline as investors awaited unemployment claims in the United States.

A forecast of a million claims pressured the currency in the FX market, as companies lay off workers. The coronavirus outbreak has largely impacted the U.S. employment sector among others globally.

Some analysts say jobless claims could even exceed 1 million as more companies would have to shed workers. The rapid spread of COVID-19 is likely to cause a global recession.

Tohru Sasaki of JP Morgan Securities said, “It could be difficult for the markets to digest weekly jobless claims.” He said bad numbers are expected and priced in to a certain extent. “But, there are people who think things will get even worse,” he added.

“In the end, this may support the U.S. dollar as investors choose to bring their money home,” said Sasaki.

The U.S. Senate passed a $2 trillion relief package to offset the economic impact of the COVID-19 pandemic. However, the stimulus package failed to boost the dollar. There are indications some states will need more money for medical supplies as the healthcare system struggles to cope.

In forex, the U.S. dollar index which tracks the greenback against a basket of other currencies slid 0.19 to 100.810. 

The U.S. Dollar Against Other Currencies

The U.S. dollar fell 0.47% to 110.69 yen in Asia on Thursday. Against the Swiss franc, the dollar eased slightly to 0.9752.

The AUD/USD pair fell 0.77% to 0.5912, while the NZD /USD pair lost 0.33% to 0.5828. Both the Aussie and the kiwi dropped to multi-year lows in early March due to investors liquidating positions.              

Moreover, the USD/JPY pair was down 0.49% to 110.64 and the USD/CNY pair lost 0.02% to 7.1088.      

The pound’s losses accelerated in Asian forex trading after the announcement on the rise in the number of coronavirus cases. The British government reported the total number of COVID-19 cases rose to 9.529 on Wednesday from 8.077 the previous day.

The sterling was down at 0.3% to $1.1837 and down at 0.6% to 92.11 pence per euro. On the other hand, the euro rose 0.2% to $1.0901 in Asia on Thursday.

The pound extended declines against the euro and the dollar, despite Prime Minister Boris Johnson’s stricter new regulations. Investors were still concerned the UK is inadequately prepared for the spike in the number of coronavirus cases.