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Forex News: Dollar Falls Ahead Of U.S. Jobless Claims

Dollar Falls Ahead Of U.S. Jobless Claims

03/26/2020 - 07:00:00 (RTTNews)

(RTTNews) - The U.S. dollar declined against its major counterparts in early European deals on Thursday, as investors await U.S. jobless claims later in the day, which reflects the impact of the pandemic.

Consensus estimates suggest that 1.6 million people may have filed unemployment claims in the week ended March 21, up from 281,000 in the previous week.

The data is expected to show a massive spike in unemployment claims amid layoffs due to the rapid spread of the coronavirus.

The data is due at 8:30 am ET.

The decline came even after the US senate unanimously passed a $2 trillion fiscal stimulus package to mitigate the economic effects of the virus.

Sentiment dampened after Spain's coronavirus death toll overtook that of China, prompting lawmakers to extend the state of emergency until April 12.

Italy's death toll from the virus crossed the 7,500 mark and New York turned out to be the epicenter of the U.S. outbreak with over 30,000 cases, raising concerns about a global recession.

Worldwide, there are more than 472,000 diagnosed cases of COVID-19, spanning every continent except Antarctica.

The greenback dropped to 1.1961 against the pound, from a high of 1.1777 seen at 7:15 pm ET. The greenback is seen finding support around the 1.22 mark.

Data from the Office for National Statistics showed that UK retail sales declined unexpectedly in February.

Retail sales dropped 0.3 percent on a monthly basis in February, in contrast to a 1.1 percent rise in January and confounding expectations for an increase of 0.2 percent.

The greenback fell to a 1-week low of 0.9710 against the franc, after rising to 0.9775 at 6:30 pm ET. If the greenback falls further, 0.95 is likely seen as its next support level.

Reversing from a high of 111.29 set at 5:15 pm ET, the greenback slipped to a 3-day low of 109.81 against the yen. The next possible support for the greenback is seen around the 108.00 level.

Data from the Bank of Japan showed that producer prices in Japan were up 2.1 percent on year in February.

That was shy of expectations for an annual increase of 2.2 percent and down from 2.3 percent in January.

The greenback was down against the euro at a 1-week low of 1.0951. Further fall in the greenback may face support around the 1.12 area.

Survey data from market research group GfK showed that German consumer confidence is set to decline sharply to the lowest in more than a decade in April as the increase in the number of coronavirus infection cases and the accompanying measures made consumers to take cautious approach.

The forward-looking consumer confidence index fell to 2.7 from 8.3 in March. The score was forecast to fall moderately to 7.7 from March's initially estimated value of 9.8.

The greenback retreated to 0.5978 against the aussie and 0.5867 against the kiwi, from its early 2-day highs of 0.5870 and 0.5777, respectively. The greenback may challenge support around 0.68 against the aussie and 0.64 against the kiwi.

The greenback touched 1.4123 against the loonie, its lowest level since March 17. The currency is likely to face support around the 1.33 region, if it falls again.

Looking ahead, the Bank of England announces its monetary policy decision at 8:00 am ET. Economist expect the benchmark rate to be retained at 0.1 percent and the asset purchase target at GBP 645 billion.

In the New York session, U.S. GDP data for the fourth quarter, weekly jobless claims for the week ended March 21, wholesale inventories and advance goods trade balance for February will be published.

For comments and feedback: contact editorial@rttnews.com

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