US Dollar Flat As Initial Jobless Claims Rise for First Time Since March

The US dollar is trading flat against its G10 currency rivals on Thursday after the US government reported that initial jobless claims rose for the first time since the start of the coronavirus pandemic. Does this mean the job situation is beginning to deteriorate? Or is this a blip on the radar? Financial markets are hardly reacting to the news in pre-market trading as the leading stock indexes are also relatively unchanged.

According to the Department of Labor, the number of Americans filing for first-time unemployment benefits surged 1.42 million in the week ending July 18. This came in worse than the median estimate of 1.3 million. It was also the first weekly increase since March. In total, nearly 53 million jobless Americans have filed for unemployment benefits since March 21.
Continuing jobless claims reached 16.197 million, while the four-week moving average, which eliminates week-to-week volatility, topped 1.36 million.
Last week, initial jobless claims came in at 1.3 million, higher than the market projection of 1.25 million.
Meanwhile, Treasury Secretary Steven Mnuchin revealed to CNBC that the Republican COVID-19 relief plan for the unemployment extension will be based on a â€œ70% wage replacement.” He told the business news network that the GOP plans to unveil an official plan sometime Thursday, and then negotiate a final plan with the Democratic-controlled Congress.
Congress has been working diligently to pass another coronavirus aid package with the $600 jobless benefits expiring at the end of the month. With talk of lockdowns due to the resurgence in new cases and states hemorrhaging red ink, the federal government has been pushed to extend unemployment benefits.
The bond market was impacted by the news. The benchmark 10-year Treasury tumbled 1.6 basis points to a three-month low of 0.579%. The 30-year bond yield slipped 2.3 basis points to 1.267%.
Amid growing uncertainty in the broader financial market and potential political turbulence, the US Dollar Index has been rebounding. The index, which measures the greenback against a basket of currencies, rose 0.18% to 95.16, from an opening of 94.98. The index wiped out its gains from earlier this year and is trading down more than 1% year-to-date.
The USD/CAD currency pair rose 0.01% to 1.3417, from an opening of 1.3416, at 13:16 GMT on Thursday. The EUR/USD fell 0.1% to 1.1559, from an opening of 1.1570.
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