The US dollar is struggling for direction on Thursday after the US government reported a larger-than-expected initial jobless claims report. It has been a roller coaster ride for the greenback this week as a series of events have lifted or suppressed the buck, such as the market crash on Monday. So, what is in store for the dollar moving forward?
According to the US Bureau of Labor Statistics (BLS), the number of Americans filing for unemployment benefits climbed to 419,000 in the week ending July 17, up from 368,000 in the previous week. The market had penciled in a reading of 350,000.
Continuing jobless claims surged to 3.236 million, while the four-week average, which removes week-to-week volatility, topped 385,000.
Overall, the latest jobless claims highlight a concerning trend among economists and market analysts: the recovery in the labor market is uneven. Still, even with a disappointing snapshot of the workforce, the post-pandemic economy has expanded and job creation has been decent. But with rising cases of the delta variant, some experts are warning the economic recovery could hit a bump in the road.
Indeed, there has been an increase in the number of COVID-19 infections over the last month, nearing 61,000 cases on July 21. But coronavirus-related deaths continue to be in the low triple digits.
On Friday, the latest purchasing managers’ index (PMI) figures will be released.
The bond market was mostly in the red toward the end of the trading week, with the benchmark 10-year Treasury down 0.012% to 1.27%. The one-year bill was unchanged at 0.071%, while the 30-year bond slipped 0.011% to 1.919%.
The US Dollar Index (DXY), which measures the greenback against a basket of currencies, tumbled 0.17% to 92.60, from an opening of 92.80. The DXY is flat on the week, but the index is up about 3% year-to-date.
The USD/CAD currency pair rose 0.28% to 1.2595, from an opening of 1.2559, at 13:54 GMT on Thursday. The EUR/USD jumped 0.2% to 1.1820, from an opening of 1.1797.