US Dollar Struggles for Direction As New Jobless Claims Fall Below 800k

The US dollar is looking for direction on Thursday as initial jobless claims and the Congress unable to strike a coronavirus stimulus and relief deal. The greenback has been trending downward this month following a rally in September, driven primarily by confidence in the broader financial market and optimism over the on-again, off-again stimulus negotiations.

According to the Department of Labor, the number of Americans filing for unemployment benefits clocked in at 787,000 for the week ending October 17, down from the previous week’s reading of 842,000. This is the second time since the start of the pandemic that initial jobless claims fell below 800,000.
Continuing jobless claims dropped to 8.373 million, while the four-week average, which removes week-to-week volatility, topped 811,000.
Some economists say that the report is not as rosy as it looks. Many people who were given assistance from the states have been shifted to federal compensation, tripling to 3.3 million since August. The number of people receiving benefits from eight federal and state programs is still more than 23 million.
Meanwhile, California finally released its new jobless claims after a couple of weeks of hiatus due to backlogs and fraud investigations. The Golden State reported that new jobless claims totaled 158,877, down from just over 176,000 earlier this month.
In other data, existing home sales surged 9.4% in September to 6.54 million, beating the median estimate of 5%. The Kansas City Fed Manufacturing Index edged up to 23 in October, the Conference Board Leading Index rose 0.7% last month.
On Friday, the IHS Markit services, composite, and manufacturing purchasing managers’ index for October will be released.
House Speaker Nancy Pelosi told reporters that Democratic leadership and the White House were “just about there” on new COVID-19 aid, noting that both sides have not agreed on state and local funding.

If we were not making progress, I wouldn’t spend five seconds in these conversations. … This is not anything other than I think a serious attempt. I do believe that both sides want to reach an agreement.

That said, she conceded that it could take time for lawmakers to write and vote on any legislation, which would then require signing from President Donald Trump and the distribution of the funds.
The US Dollar Index, which gauges the greenback against a basket of currencies, advanced 0.35% to 92.94, from an opening of 92.67. The index is poised for a weekly slump of 1%, adding to its 2020 woes of about 3%.
The USD/CAD currency pair was unchanged at 1.3144 at 18:57 GMT on Thursday. The EUR/USD fell 0.36% to 1.1818, from an opening of 1.1860.
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