DXY Extends Weakness As Initial Jobless Claims Near 800k

The US dollar added to its weekly decline on Thursday after initial jobless claims came in higher than market forecasts. With nearly 800,000 people applying for unemployment benefits, the American labor market is failing to recovery, despite coronavirus vaccines rolling out, states reopening their economies, and new infections coming down. Is the mini-bull run over for the greenback?

According to the Bureau of Labor Statistics (BLS), the number of Americans filing for unemployment benefits touched 793,000, higher than the median estimate of 757,000. Continuing jobless claims hit 4.545 million, while the four-week average, which removes week-to-week volatility, touched 823,000.
Close to 335,000 applications were submitted through a temporary federal-relief program. When adding up new federal and state claims, the government received 1.15 million applications in the past week, showing that combined claims have yet to fall below one million since the height of the coronavirus pandemic.
Florida, Kansas, Maryland, New York, and Texas saw the largest decline in applications. California and Ohio reported the biggest increases.
Before the COVID-19 public health crisis, initial jobless claims hovered around 200,000 per week.
Market analysts believe that hiring will pick up the pace later in the year as more people get vaccinated, and businesses are allowed to reopen. At the same time, there is a concern that many positions could have been eliminated permanently since companies might not be able to resume normal operations for another year.
On Wednesday, Federal Reserve Chair Jerome Powell delivered a speech to the Economic Club of New York, reiterating that near-zero interest rates are here to stay and monetary policy will continue to accommodate to support the economic recovery. The US central bank head warned that the country is “a long way” from achieving full employment.

Fully realizing the benefits of a strong labor market will take continued support from both near-term policy and longer-run investments so that all those seeking jobs have the skills and opportunities that will enable them to contribute to, and share in, the benefits of prosperity.

Despite the surprising speed of recovery early on, we are still very far from a strong labor market whose benefits are broadly shared.

Treasurys were mostly in the red toward the end of the trading week, with the benchmark 10-year bond down 0.005% to 1.147%. The one-year note was flat at 0.071%, while the 30-year bond slipped 0.004% to 1.92%.
The US Dollar Index, which gauges the greenback against a basket of currencies, slid 0.05% to 90.33, from an opening of 90.46. The DXY is on track for a weekly plunge of about 1.3%, paring its year-to-date rally to below 0.5%
The USD/CAD currency pair tumbled 0.14% to 1.2683, from an opening of 1.2700, at 14:01 GMT on Thursday. The EUR/USD advanced 0.12% to 1.2135, from an opening of 1.2118.
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Original from: www.earnforex.com