US Dollar Index (DXY) Slumps As Jobless Claims Surge 744k

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The US dollar is struggling against multiple currency rivals on Thursday after initial jobless claims surged higher than the market forecast. The greenback has weakened this week during several lackluster trading sessions in the broader financial markets. So far this year, the buck has defied most analysts’ expectations, rallying about 3% amid volatility, economic concerns, and the coronavirus pandemic.

According to the Bureau of Labor Statistics (BLS), initial jobless claims hit 744,000 in the week ending April 3, higher than the median estimate of 680,000. This is up from 728,000 in the previous week.

Continuing jobless claims climbed to 3.734 million, while the four-week average, which removes week-to-week volatility, topped 723,000.

An additional 151,752 applications were submitted through a temporary federal relief program. Still, when federal and state jobless claims are combined, they remained below one million again.

California and New York reported the sharpest increases in the number of Americans filing for unemployment benefits. Ohio and Texas saw the most declines in the country.

This comes a week after the US government reported that 916,000 new jobs were created in March as more economies reopened, more Americans got vaccinated, and more companies hired or rehired workers.

In other economic data, mortgage applications declined 5.1% in the week ending April 2, while the 30-year mortgage rose to 3.36%. The US trade deficit widened to $71.1 billion as imports fell 0.7% to $258.3 billion and exports tumbled 2.6% to $187.3 billion.

On Wednesday, the Federal Reserve released the minutes from last month’s Federal Open Market Committee (FOMC) policy meeting. It revealed that officials were agreement that easy policy would remain intact until economic outcomes are achieved, noting that the $120 billion monthly bond purchases “were providing substantial support to the economy.”

Participants noted that it would likely be some time until substantial further progress toward the Committee’s maximum-employment and price-stability goals would be realized and that, consistent with the Committee’s outcome-based guidance, asset purchases would continue at least at the current pace until then.

A number of participants highlighted the importance of the Committee clearly communicating its assessment of progress toward its longer-run goals well in advance of the time when it could be judged substantial enough to warrant a change in the pace of asset purchases. The timing of such communications would depend on the evolution of the economy and the pace of progress toward the Committee’s goals.

The US central bank also raised its median outlook for the gross domestic product in 2021, from 4.2% in December to 6.5%.

The US bond market was mostly in the red toward the end of the trading week, with the benchmark 10-year Treasury yield down 0.021% to 1.633%. The one-year bill dipped 0.01% to 0.056%, while the 30-year bond fell 0.018% to 2.318%.

The US Dollar Index (DXY) tumbled 0.36% to 92.13, from an opening of 92.42. The index has dropped about 0.9% this week, paring its year-to-date slide to below 3%.

The USD/CAD currency pair slid 0.1% to 1.2598, from an opening of 1.2610, at 14:19 GMT on Thursday. The EUR/USD rose 0.25% to 1.1903, from an opening of 1.1869.

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