The US dollar weakened toward the end of the trading week as financial markets process the unexpected jump in initial jobless claims. The greenback has had a rough start to 2022, failing to repeat the tremendous performance from last year. Will the Federal Reserve’s actions support the buck?

According to the Bureau of Labor Statistics (BLS), the number of Americans filing for unemployment benefits increased 286,000 in the week ending January 15, higher than the market forecast of 220,000. This is also up from 231,000 a week ago,

Continuing jobless claims surged to 1.635 million, while the four-week average, which removes week-to-week volatility, climbed to 231,000.

The significant increase comes as the Omicron variant is beginning to impact the labor market.

“As we get into late-January and February, this seasonal issue will be less of a problem and it will be easier to take claims at face value,” economists at Jefferies said in a note to clients. “But for now, it is appropriate to be a bit skeptical or strength or weakness in claims.”

Some economists do not think the Omicron-induced problems will result in long-term consequences for the labor market.

“Don’t read too much into that,” said chief economist Scott Brown of Raymond James. “Weekly figures can be a bit erratic at the start of the year, and the seasonal pattern may have changed through the pandemic, but Omicron likely had an impact.”

Despite the worrisome trend of initial jobless claims, the financial markets are in the green at the opening bell, looking to reverse some of the losses the leading benchmark indexes endured this week. But the same could not be said for the buck.

The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, dipped 0.01% to 95.50, from an opening of 95.51. The index is down 0.5% year-to-date.

The US Treasury market was mixed on Thursday, with the benchmark 10-year yield down 0.002% to 1.825%. The one-year bill rose 0.008% to 0.545%, while the 30-year bond edged up 0.007% to 2.146%.

The USD/CAD currency pair tumbled 0.25% to 1.2484, from an opening of 1.2517, at 13:28 GMT on Thursday. The EUR/USD climbed 0.04% to 1.1348, from an opening of 1.1343.