The US dollar is strengthening on Thursday after the US government reported its lowest number of Americans filing for unemployment benefits since the COVID-19 crisis started two months ago. The news elevated the greenback, which also surged on weakening equities that have prompted global investors to pour into the traditional safe-haven asset this week.
According to the Department of Labor, initial jobless claims came in at 2.981 million for the week ending May 9, worse than the median estimate of 2.5 million. This is the lowest reading since the coronavirus pandemic started two months ago. Continuing jobless claims clocked in at 22.833 million. The jobless four-week moving average, which eliminates the week-to-week volatility, totaled 3.616 million.
Last week, the number of Americans filing for unemployment benefits was 3.169 million. Continuing jobless claims reached 22.647 million, while the four-week moving average was 4.173 million.
In total, approximately 36 million Americans have lost their jobs in eight weeks, but the job-loss trend appears to have peaked.
US financial markets barely reacted to the news as the leading stock indexes were in the red in pre-market trading, mostly due to the Federal Reserveâs gloomy assessment of the economy on Wednesday. Fed Chair Jerome Powell warned of a prolonged economic downturn and a slower recovery due to the COVID-19 public health crisis, urging Congress to adopt additional fiscal policy tools to support growth. But while he dismissed imposing subzero interest rates, Powell revealed that the central bank could employ more monetary policy measures.
In other economic data, import prices fell 2.6% in April, down from the 2.4% drop in March. Analysts had penciled in a drop of 3.1%. Still, this is the steepest decline in import prices since January 2015, driven primarily by the collapse in crude oil prices. Export prices also slumped 3.3%, down from a 1.7% slide in the previous month. This was the largest decrease in the history of the Bureau of Labor Statistics (BLS)‘s 32-year-old monthly report.
The US Dollar Index, which measures the greenback against a basket of currencies, rallied on the job numbers. The index advanced 0.21% to 100.46, from an opening of 100.19, which further lifted its year-to-date gain to more than 4.2%.
The USD/CAD currency pair rose 0.13% to 1.4119, from an opening of 1.4102, at 12:43 GMT on Thursday. The EUR/USD slid 0.24% to 1.5218, from an opening of 1.5255.
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