US Dollar Struggles As Initial Jobless Claims Surge 900k

The US dollar is sliding against its major currency peers on Thursday, the first full day of President Joe Biden‘s term in the White House. The greenback is sliding mostly on disappointing employment data, with initial jobless claims remaining at monthly highs.

According to the Bureau of Labor Statistics (BLS), the number of Americans filing for unemployment benefits came in at 900,000 in the week ending January 16. This is slightly lower than the median estimate of 910,000, and it is down from the previous week’s reading of 926,000.
Continuing jobless claims reached 5.054 million, while the four-week average, which eliminates week-to-week volatility, totaled 848,000.
Moreover, another 423,734 applications were submitted through a temporary federal-relief program. This could be higher due to a whole host of temporary positions ending after the holiday season.
As a result, when you total the new federal and state jobless claims, the US government received 1.38 million applications. Combined unemployment claims had not fallen below one million per week since before the COVID-19 pandemic when they were coming in at around 200,000 a week.
California and Nevada recorded the biggest weekly gains, while Florida reported the largest decline.
Overall, it is widely believed that the labor data will not improve until COVID-19 infections are curbed, and the national economy reopens.
In other data, building permits rose 4.5% in December to 1.709 million, and housing starts advanced 5.8% to 1.669 million. The Federal Reserve Bank of Philadelphia’s Manufacturing Index surged to 26.5 points in January, up from 9.1 points in December.
On Friday, the IHS Markit’s purchasing managers’ index (PMI) readings will be released for composite, services, and manufacturing.
During her Senate Confirmation Hearing this week, incoming Treasury Secretary Janet Yellen, who also headed the Federal Reserve from 2014 to 2018, revealed that her department would take a more hands-off approach to the greenback. However, her support for large-scale stimulus and relief packages could weigh on the strength of the buck, especially if investors become more risk-tolerant in the broader financial markets.
The US bond market was mixed toward the end of the trading week, with the benchmark 10-year Treasury edging up 0.014% to 1.104%. The one-year note was unchanged at 0.099%, while the 30-year bond jumped 0.021% to 1.863%.
The US Dollar Index, which gauges the greenback against a basket of currencies, slumped on Thursday, sliding 0.28% to 90.22, from an opening of 90.42. The DXY has enjoyed a decent start to 2021, rising about 0.3% in the first weeks of the calendar year.
The USD/CAD currency pair fell 0.06% to 1.2627, from an opening of 1.2636, at 13:42 GMT on Thursday. The EUR/USD rose 0.25% to 1.2138, from an opening of 1.2107.
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Original from: www.earnforex.com