Dollar Drops After U.S. Weekly Jobless Claims Tick Up
The U.S. dollar was lower against its most major counterparts in
the European session on Wednesday, as a rise in fist-time claims
for U.S. unemployment benefits suggested a slowdown in the labor
Data from the Labor Department showed that initial jobless
claims climbed to 778,000, an increase of 30,000 from the previous
week's revised level of 748,000.
The increase surprised economists, who had expected jobless
claims to drop to 730,000 from the 742,000 originally reported for
the previous week.
Data from the Commerce Department showed that U.S. durable goods
orders jumped more than expected in October.
The durable goods orders jumped by 1.3 percent in October after
spiking by 2.1 percent in September. Economists had expected
durable goods orders to climb by 0.9 percent.
Separate data showed that the spike in gross domestic product in
the third quarter was unrevised from the initial estimate.
The Commerce Department said GDP skyrocketed by an annual rate
of 33.1 percent in the third quarter after plunging by 31.4 percent
in the second quarter. The unrevised reading on GDP matched
The Fed minutes are due at 2:00 pm ET, with investors looking
for clues on the direction of monetary policy.
Progress in development of coronavirus vaccines raised hopes for
a quicker economic recovery.
U.S. political uncertainty faded and President elect Joe Biden
and his team started the process of transition into the White
Biden's selection of former Fed chair Janet Yellen as Treasury
Secretary also cheered investors.
The greenback weakened in the Asian session, as encouraging
vaccine news and the formal start of U.S. President elect Biden's
transition to the White House underpinned risk sentiment.
The greenback fell back to 1.1915 against the euro, heading to
pierce its early near a 3-month low of 1.1930. The pair was worth
1.1890 when it closed deals on Tuesday. On the downside, 1.22 is
possibly seen as its next support level.
The European Central Bank said lenders might require higher loan
loss provisioning amid missed payments and rising number of
In the latest Financial Stability Review, the ECB said since the
global financial crisis, weak profitability prospects continue to
weigh on bank valuations despite the increased resilience of euro
The greenback eased to 1.3359 against the pound, from a high of
1.3305 hit at 6:00 am ET. This may be compared to a 2-day low of
1.3384 touched during early European trading. The greenback is
likely to challenge support around the 1.35 level.
Pulling away from a 2-day high of 0.9139 seen at 4:45 am ET, the
greenback moved down to 0.9101 against the franc. At yesterday's
trading close, the pair was quoted at 0.9110. If the greenback
falls further, 0.88 is likely seen as its next support level.
The greenback held steady against the yen, after having declined
to 104.34 at 5:00 am ET. The pair had closed Tuesday's deals at
Data from the Bank of Japan showed that Japan's services
producer prices declined in October.
The services producer price index fell 0.6 percent on a yearly
basis, reversing a 1.4 percent rise in September.
The University of Michigan's final consumer sentiment index for
November, as well as new home sales and personal income and
spending data for October will be published shortly.
The Fed minutes from the November 4-5 meeting are set for
release at 2:00 pm ET.
Euro vs US Dollar (FX:EURUSD)
From Dec 2020 to Jan 2021
Euro vs US Dollar (FX:EURUSD)
From Jan 2020 to Jan 2021