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Forex News: Record Surge In U.S. Jobless Claims Intensifies Dollar

Record Surge In U.S. Jobless Claims Intensifies Dollar Sell-off

03/26/2020 - 11:06:00 (RTTNews)

(RTTNews) - The U.S. dollar lost ground against its major counterparts in early New York deals on Thursday, as first-time claims for unemployment benefits soared to an all-time high last week amid the Covid-19 pandemic shut down in large parts of the U.S. economy.

Data from the Labor Department showed that initial jobless claims skyrocketed to 3,283,000 in the week ended March 21, an increase of 3,001,000 from the previous week's revised level of 282,000.

Economists had expected jobless claims to spike to about 1.5 million from the 281,000 originally reported for the previous week.

With the record-breaking increase, the number of seasonally adjusted initial claims reached the highest level in the history of the seasonally adjusted series.

The grim data has offset optimism over the Senate approval of $2 trillion fiscal stimulus package to mitigate the economic effects of the virus.

The bill now heads to the Democrat-controlled House for final approval on Friday.

In other economic releases, data from the Commerce Department showed that the increase in U.S. gross domestic product in the fourth quarter was unrevised from the previous estimate.

The Commerce Department said GDP increased by 2.1 percent in the fourth quarter, unchanged from the estimate provided last month and in line with economist estimates.

The greenback was down against the euro at an 8-day low of 1.0990. The pair had finished Wednesday's deals at 1.0882. 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.

Having climbed to 111.29 at 5:15 pm ET, the greenback slipped to a 6-day low of 109.38 against the yen. At Wednesday's close, the pair was worth 111.20. Next likely support for the greenback is found around the 108.00 level.

Data from the Bank of Japan showed that Japan producer prices rose 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 fell to a 1-week low of 0.9676 against the franc, after rising to 0.9775 at 6:30 pm ET. Should the greenback falls further, 0.95 is likely seen as its next support level.

The greenback dropped to an 8-day low of 1.2037 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 touched 1.4066 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.

After rising to a 2-day high of 0.5777 in the previous session, the greenback moved down against the kiwi, reaching an 8-day low of 0.5933. The greenback may challenge support around the 0.64 area.

The greenback reached as low as 0.6057 against the aussie, following a 2-day jump to 0.5870 at 10:00 pm ET. Immediate support for the dollar is seen near the 0.68 level.

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