US Dollar Strengthens on Jobless Claims Sliding to Nine-Week Low

The US dollar is strengthening against its currency peers on Thursday as the number of Americans filing for unemployment benefits fell below 800,000. The greenback is finding support on positive economic data as the broader financial markets trade relatively flat. The buck has had a strong start to 2021, beating market forecasts and rallying more than 1% in the first few weeks of the calendar year.

According to the Bureau of Labor Statistics (BLS), initial jobless claims fell to a nine-week low of 779,000, below the median estimate of 830,000, in the week ending January 30.
Continuing jobless claims dropped below 4.6 million, while the four-week average, which eliminates week-to-week volatility, clocked in at 848,250.
But an additional 348,912 applications were submitted through a temporary federal-relief program. When you add up new federal and state unemployment claims, the US government received 1.17 million applications. The combined claims have failed to slide below one million since the start of the pandemic.
It should also be noted that another 3.6 million out-of-work Americans who have exhausted their benefits have transferred to a federal emergency fund, a drop of nearly 290,000 from the previous week.
New applications for jobless benefits declined the most in Illinois, followed by Kansas, Ohio, Tennessee, and Texas. Unemployment applications surged the most in California, New York, and Florida.
Meanwhile, all eyes will be on the January jobs report on Friday. Economists are forecasting 50,000 new jobs and an unemployment rate of 6.7%. On Wednesday, ADP reported that private payrolls increased 174,000, up from 78,000 in December.
In other labor-related data, unit labor costs advanced 6.8% in the fourth quarter, up from the 7% decrease in the third quarter. Non-farm productivity tumbled 4.8% in the October-to-December period, down from the 5.1% gain in the July-to-September quarter.
The US bond market was mixed, with the benchmark 10-year Treasury up 0.031% to 1.16%. The one-year note was flat at 0.076%, while the 30-year bond jumped 0.038% to 1.95%.
The US Dollar Index, which measures the buck against a basket of currencies, maintained its momentum, rising 0.27% to 91.42, from an opening of 91.09. The DXY is poised for a weekly gain of more than 1%.
The USD/CAD currency pair advanced 0.35% to 1.2830, from an opening of 1.2786, at 13:45 GMT on Thursday. The EUR/USD declined 0.45% to 1.1981, from an opening of 1.2038.
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Original from: www.earnforex.com