Forex News

Live Forex news from all over the world.


US Dollar Rises As First-Time Jobless Claims Dip Below Two Million

June 4, 2020 at 13:05 by Andrew Moran

A USD bill sloping downwardsThe US dollar is strengthening against its G10 currency rivals on Thursday after the federal government reported that the number of Americans filing for unemployment benefits came in below two million for the first time in 12 weeks. This adds further evidence that the job-loss trend peaked and that the US economy is likely emerging from the doldrums of the coronavirus pandemic.

According to the Department of Labor, initial jobless claims clocked in at 1.877 million in the week ending May 30, slightly worse than the 1.8 million the market had anticipated. Continuing jobless claims reached 21.487 million, while the four-week average, which removes the week-to-week volatility, eased to 2.284 million.

Last week, the number of Americans filing for unemployment benefits came in at 2.123 million. It was also reported that the labor market may have already clawed back about five million lost jobs over the last couple of weeks.

Unit labor costs in the private sector surged at an annualized pace of 5.1% in the first quarter, the Bureau of Labor Statistics (BLS) reported. This is higher than the preliminary projection of 4.8% and is up from 2.2% in the fourth quarter of 2019. It is also the largest increase since January 2019.

Non-farm productivity in the January-to-March period slipped by an annualized 0.9%, down from the 1.2% jump in the October-to-December period. Output dropped 6.5%, while wages fell 5.6%.

On the trade front, the US deficit widened to $49.4 billion in April, matching the median estimate of $49 billion. This is the biggest trade gap in seven months. Imports tumbled 13.7% to $200.7 billion, led by drops in automobiles and consumer goods. Exports plummeted 20.5% to $151.3 billion, led by declines in capital goods, industrial supplies and materials, and automobiles.

Despite the positive trend in first-time jobless claims and trade data meeting forecasts, financial markets are in the red during pre-market trading.

The US Dollar Index, which measures the greenback against a basket of currencies, jumped 0.05% to 97.32, from an opening of 97.28. The index has plunged more than 1% this week and has wiped out most of its losses. Year-to-date, it is just 0.95%.

The USD/CAD currency pair rose 0.18% to 1.3520, from an opening of 1.3495, at 12:59 GMT on Thursday. The EUR/USD edged up 0.04% to 1.1240, from an opening of 1.1233.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Leave a Reply