The U.S. dollar exhibited weakness against its peers on Thursday, reacting to data on private sector employment for the month of April, and unemployment claims in the week ended May 1.
According to the data released by the Labor Department on Thursday morning, first-time claims for U.S. unemployment benefits pulled back further off their recent record high in the week ended May 2nd, although claims remain at an elevated level and came in above economist estimates.
The report said initial jobless claims dropped to 3.169 million, a decrease of 677,000 from the previous week’s revised level of 3.846 million.
Economists had expected jobless claims to tumble to 3.000 million from the 3.839 million originally reported for the previous week.
While jobless claims have declined steadily since hitting a record high of 6.867 million in the week ended March 28th, the total number of new claims since the coronavirus-induced shutdown has now reached 33.5 million.
A separate report released by the Labor Department on Thursday showed U.S. labor productivity slumped by 2.5% in the first quarter after jumping by 1.2% in the fourth quarter of 2019. Economists had expected productivity to plunge by 5.5%.
Data released by ADP on Wednesday showed U.S. private sector employment plunged by as much as 20.236 million jobs in April.
Job losses of this scale are unprecedented and even that estimate may undershoot the full extent of America’s unemployment crisis, analysts said.
The ADP report warned that, because it relies mostly on data collected early in the month, its data “does not reflect the full impact of Covid-19 on the overall employment situation.”
The dollar index dropped to 99.81, losing about 0.28% and continued to move in a very tight band since then.
The dollar weakened to $1.0832 against the Euro, falling from $1.0795.
Against Pound Sterling, the dollar dropped to $1.2362, losing 0.17% from previous close of $1.2341. the Bank of England decided to hold interest rates at 0.1% today. The bank said it would take further actions in case the economic crisis worsened due to the virus pandemic.
The BoE says the economy could shrink by 25% in the April-June period and by 14% in full 2020, before rebounding by 15% in 2021.
The Japanese currency was stronger against the greenback at 106.28 a dollar, compared with 106.66 a dollar Wednesday evening.
The Aussie was pretty stronger with a unit fetching $0.6491, about 1.4% more than $0.6402 on Wednesday.
The Swiss franc was up at 0.9731 a dollar, after closing at 0.9749 a dollar on Wednesday.
Against the loonie, the dollar weakened to C$1.3991, losing 1.1% from C$1.4146.
The material has been provided by InstaForex Company – www.instaforex.com
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