The US dollar is sliding against multiple currency rivals on Thursday, but it is holding relatively steady. This might come as a surprise for market observers because the greenback and the broader financial market should be in freefall following record-breaking jobs numbers. It is the opposite.
According to the Bureau of Labor Statistics (BLS), initial jobless claims soared to an all-time high of 3.283 million for the week ending March 21. This is up from last weekâs 282,000 claims and is more than double what analysts had anticipated. Continuing jobless claims rose 1.803 million, up more than 100,000 from the previous week.
The record-high jobless claims show just how damaging the coronavirus pandemic has been to the robust labor market. Over the last 12 months, the number of Americans filing unemployment benefits had been in the range of 170,000 and 200,000.
During pre-market trading, the leading US stock indexes surprisingly pared their losses after the report was published. This suggests that investors believe the worst is over and that next weekâs reading will be an improvement. The Dow Jones was down as much as 500 points in pre-market, but the index gained about 250 points.
In other data, the final gross domestic product (GDP) growth rate reading for the fourth quarter came in at 2.1%. The GDP Q4 price index clocked in at 1.4%. The goods trade deficit narrowed to -$59.89 billion in February, up from -$65.9 billion
Personal consumption expenditures (PCE) prices jumped 1.4% in the October-to-December period, down from 1.5% in the third quarter. Core PCE prices edged up 1.3%, down from 2.1% in Q3.
The US Dollar Index, which measures the greenback against a basket of currencies, plummeted on the news. The index fell 0.7% to 100.34, from an opening of 100.96. The buck continues its streak of losses as the Federal Reserve and the US government expand fiscal and monetary policy by trillions of dollars. But the index remains up 4% year-to-date.
The USD/CAD currency pair tumbled 0.39% to 1.4135, from an opening of 1.4193, at 12:44 GMT on Thursday. The EUR/USD rose 0.62% to 1.0951, from an opening of 1.0883.
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