US Dollar Index Slides As Jobless Claims Surge to 861k

The US dollar weakened on Thursday, joining the decline in the broader financial markets. The greenback is slumping after the US government reported a larger-than-expected reading for initial jobless claims. While the dollar has rebounded over the last week, the greenback has ostensibly hit the pause button on its meteoric ascent to kick off 2021.

According to the Bureau of Labor Statistics (BLS), the number of Americans filing for unemployment benefits climbed to 861,000 in the week ending February 13, coming in much higher than the median estimate of 765,000. This is up from last week’s figure of 848,000.
Continuing jobless claims came in just below 4.5 million, while the four-week average, which removes week-to-week volatility, topped 833,000.
The weekly report highlighted an additional 516,2999 applications were submitted through a temporary federal-relief program. When the new federal and state claims were are combined, the government received 1.38 million applications for jobless benefits. These claims have yet to slide below one million per week since the early days of the COVID-19 pandemic.
New applications surged the most in California, Illinois, and Virginia. The largest declines occurred in Georgia and Texas.
In other economic data, building permits surged 10.4% to 1.881 million in January, up from 4.2% in December. Housing starts tumbled 6% to 1.58 million, down from the 8.2% gain in the previous month.
Export prices rose 2.5% in January, while import prices picked up 1.4%. The Federal Reserve Bank of Philadelphia’s Manufacturing Index fell to 23.1 in February, down from 26.5 in January. The market had penciled in a reading of 20.
Financial markets may have been spooked by reports that Pfizer is warning that the South African variant could significantly reduce vaccine protection by as much as two-thirds. While cases have been coming down in the US and in many parts of the world, the medical experts have sounded the alarm about an explosion in new infections from these variants.
The bond market was mostly in the green toward the end of the trading week, with the benchmark 10-year Treasury edging up 0.012% to 1.311%. The one-year note dipped 0.002% to 0.066%, while the 30-year bond tacked on 0.022% to 2.091%.
The US Dollar Index (DXY) tumbled 0.41% to 90.58, from an opening of 90.90. The DXY’s weekly gain is being threatened as its rally has eroded to 18%. The index has defied market expectations so far this year, increasing as much as 1.4% in the first two months of the calendar year.
The USD/CAD currency pair dipped 0.05% to 1.2695, from an opening of 1.2700, at 13:09 GMT on Thursday. The EUR/USD advanced 0.32% to 1.2081, from an opening of 1.2039.
If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Original from: www.earnforex.com