The US dollar is holding steady on Thursday after a disappointing initial jobless claims report and Washington announcing a bipartisan infrastructure deal that has been called “the largest in US history.” Financial markets rallied on the news, while commodities took a breather. Can this give the greenback the boost it needs?
According to the Bureau of Labor Statistics (BLS), the number of Americans filing for unemployment benefits totaled 411,000 in the week ending June 19. This came in higher than the median estimate of 380,000. This was the second straight week that jobless claims topped 400,000.
Continuing jobless claims hit 3.39 million, while the four-week average, which removes week-to-week volatility, came in just under 398,000.
Is this bearish news for the labor recovery? Not everyone is convinced that this will is the start of a downturn, mainly because more states are eliminating the extra federal benefits beginning next month. The federal support payments are scheduled to expire in September.
Durable goods orders advanced 2.3% in May, falling short of the market expectation of 2.8%>
The final reading of the first-quarter gross domestic product (GDP) rose 6.4%, meeting the median estimate, and the GDP price index surged 4.3% quarter-over-quarter. Wholesale inventories tumbled 1.1% in May, while the goods trade deficit worsened to $88.11 billion.
President Joe Biden announced from the White House that his administration and a bipartisan group of senators established an infrastructure agreement to improve the nation’s bridges, broadband, and roads.
Surrounded by several senators, including Mitt Romney (R-UT) and Mark Warner (D-VA), the president said in prepared remarks:
“They have my word. I’ll stick with what we’ve proposed and they’ve given me their word as well. None of us got all that we wanted. I didn’t get all that I wanted. But this reminds me of the days we used to get an awful lot done up in the United States Congress.”
Despite getting a roughly $1 trillion deal done, many specifics have yet to be ironed out. The primary hurdle for the lawmakers to overcome is learning how to generate revenue. Congressional leaders agreed not to raise taxes on anyone making under $400,000 per year, while the GOP does not want the 2017 tax cuts to be eliminated .Democratic leaders are also doubtful that they have enough votes to get the proposal approved.
The US bond market was mixed, with the benchmark ten-year yield up 0.01% to 1.497%. The one-year bill was down 0.003% to 0.081%, while the 30-year bond dropped 0.008% to 2.104%.
The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, edged up 0.02% to 91.82, from an opening of 91.80. The DXY is on track for a weekly loss of 0.1%. Year-to-date, the buck is up more than 2%.
The USD/CAD currency pair rose 0.08% to 1.2319, from an opening of 1.2309, at 17:45 GMT on Thursday. The EUR/USD edged up 0.02% to 1.1929, from an opening of 1.1927.