US Dollar Finds Support on Washington Chaos, Lower Jobless Claims

The US dollar is extending its winning streak to two sessions toward the end of the first trading week of 2021. The greenback, which has come under pressure over the last nine months, is finding support in the political chaos unfolding in Washington during the final days of President Donald Trump’s tenure. The buck’s ascent occurred alongside a rally in the financial markets and bullish economic data.

According to the Bureau of Labor Statistics (BLS), initial jobless claims came in at 787,000 in the week ending January 2. This fell short of the median estimate of 800,000, but it is slightly lower than the previous week’s reading of 790,000.
Another 161,400 applications were submitted through a temporary federal-relief program. When you factor in new federal and state claims, the number of Americans filing for unemployment benefits has yet to slide below one million since the start of the coronavirus pandemic.
Continuing jobless claims fell below 5.1 million, while the four-week average was just under 819,000.
With a new administration set to occupy the White House soon, could the US labor market be invigorated? Nancy Vanden Houten, the lead US economist at Oxford Economics, wrote in a note to clients:

While prospects for the economy later in 2021 are upbeat, the economy and labor market will have to navigate some difficult terrain between now and then, and we expect claims to remain elevated.

In other data, the Institute for Supply Management (ISM) published its non-manufacturing figures for December, reporting growth in business activity, new orders, prices, and the purchasing managers’ index (PMI). Employment fell into contraction territory last month.
On the trade front, the US trade deficit widened to $68.1 billion in November, with exports rising 1.2% to $184.2 billion and imports increasing 2.9% to $252.3 billion.
The December jobs report will finish the first trading week of 2021. The market is forecasting a gain of 71,000 jobs and an unemployment rate of 6.8%.
The US bond market was mostly up on Thursday, with the benchmark 10-year Treasury picking up 0.036% to 1.078%. The one-year note was unchanged at 0.109%, while the 30-year bond jumped 0.037% to 1.858%.
Global financial markets were still processing what happened on Wednesday in the nation’s capital when pro-Trump supporters stormed Capitol Hill. The incident that left four people dead forced many Republicans to reconsider their positions on rejecting the Electoral College certification. The Joint Session led to Joe Biden and Kamala Harris officially named as the winners of the 2020 presidential election.
The US Dollar Index (DXY), which measures the greenback against a basket of currencies, is enjoying a two-session win streak, advancing 0.37% to 89.86.
The USD/CAD currency pair surged 0.33% to 1.2720, from an opening of 1.2679, at 16:06 GMT on Thursday. The EUR/USD tumbled 0.49% to 1.2267, from an opening of 1.2330.
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Original from: www.earnforex.com