The US dollar is rising against some of its major currency counterparts on Thursday as initial US unemployment claims fell to their lowest levels since the 1960s. Despite the upbeat data, the financial markets in the red, prompting traders to seek shelter in the greenback.
According to the US Bureau of Labor Statistics (BLS), the number of Americans filing for unemployment benefits fell to 184,000 in the week ending December 4, lower than the market estimate of 215,000. This is the lowest initial jobless claims reading since 1969.
Continuing jobless claims declined to 1.992 million in the week ending November 27, higher than the median forecast of 1.9 million. The four-week average, which removes week-to-week volatility, dropped to just below 219,000.
The largest declines in new jobless claims were situated in North Carolina and Virginia. They climbed the most in California, New York, and Texas.
But the numbers skewed because the coronavirus pandemic has altered the government’s mechanism for seasonal adjustments.
“Seasonal adjustment factors continue to wreak havoc with the data, and the claims figures may remain volatile through the holiday season,” said lead US economist Nancy Van Houten of Oxford Economics.
“Looking past the noise, we think claims will eventually hover more consistently around pre-pandemic levels of 220,000, assuming the omicron variant of the coronavirus has only a moderate negative impact on the economy.”
The other factor with this report is that companies are apprehensive about terminating workers because of how challenging it is to locate workers amid the so-called “great worker shortages.”
The US Treasury market was mostly in the red on Thursday, with the benchmark 10-year yield down 0.015% to 1.494%. The one-year bill slipped 0.003% to 0.284%, while the 30-year bond dipped 0.01% to 1.865%.
The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, advanced 0.2% to 96.09, from an opening of 95.96. The DXY is trading flat for the week, but it is still up close to 7% year-to-date.
The USD/CAD currency pair climbed 0.32% to 1.2696, from an opening of 1.2653, at 13:16 GMT on Thursday. The EUR/USD fell 0.29% to 1.1311, from an opening of 1.1343.