The dollar rose for a second straight day as investors, worried about the prospect of a global recession, continued to take shelter in the greenback.
U.S. stock index futures fell on Thursday after U.S. jobless claims topped a whopping 6 million. Data showed initial claims for unemployment benefits rose to 6.65 million in the latest week from an unrevised 3.3 million the previous week. More jurisdictions enforced stay-at-home measures to curb the coronavirus pandemic. The number of Americans filing claims for unemployment benefits hit a record high for a second straight week.
Markets have been alarmed since President Trump’s warning on Tuesday of a painful two weeks ahead in fighting the coronavirus.
The United States now has over 200,000 confirmed COVID-19 cases – the most worldwide. This was another reason that sent investors flocking to safe-haven assets such as the U.S. dollar.
Sentiment was earlier lifted by a recovery in oil prices. The U.S. President Donald Trump said he expected Saudi Arabia and Russia to reach an agreement to cut output to cope with plunging demand.
Further, to combat the economic slowdown inflicted by the pandemic, the Fed said on Wednesday it was temporarily easing its leverage rules for large banks.
START TRADINGForex – Global recession prospect worries investors
Investors braced for more signs of economic pain in the world’s largest economy, ahead of another likely record week of jobless claims.
In mid-morning trading, the dollar index was up 0.7% at 100.19.
Against the yen, the dollar rose 0.2% at 107.33 yen.
The euro, meanwhile, continued its decline, falling 1.1% to $1.0843.
The Australian and New Zealand dollars made 0.6% gains late in the Asian session, though not enough to recoup steep losses from Wednesday.
The pound hit a three-week high versus the euro and gained on the dollar on Thursday. The British currency rebounded further after crashing last month amid coronavirus-driven panic on money markets.
Sterling was last up 0.9% versus the euro at 87.81 pence per euro, its highest level since March 11. Against the dollar sterling was up 0.7% at $1.2455.
The pound remains down against both the single currency and the dollar since the start of the year, by around 4% and 6% respectively.
Oil prices bounced after overnight drops. Brent futures last traded $2.57 firmer at $27.31 per barrel and U.S. crude was 8% higher at $22.00 a barrel.
Spot gold fell 0.4% to $1,585.90 an ounce.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money