The dollar did not react too significantly to today’s US data releases, with the buck remaining largely supported after Wednesday's rebound when risk aversion hit stocks and crude oil amid an alarming rise in new virus cases across the States.
The greenback was in demand against several currencies, including the euro and yen. Even gold struggled after it stopped going higher on Wednesday when it was hit by profit-taking and amid dollar strength. Stock index futures also struggled to shake off their losses as the disappointment in jobless claims underscored concerns the world’s largest economy will take a long time to recover.
US weekly jobless claims rose 1.48 million in the week ended June 20. This compared favourably to the week prior when claims were 1.54m. However, it was a smaller decline than 1.35m expected by analysts, so it was another disappointment. That said, it was partially offset by news continuing claims dropped to 19.5 million from 20.3 million the week before.
Still, the fact that jobless claims were comfortably over 1 million means this was the 14th week in a row the number has surpassed the previously unprecedented milestone. It is likely that jobless claims will remain uncomfortably high for a while yet, because of the spike in coronavirus cases across the US.
Meanwhile durable goods orders rose by a good 15.8% month-over-month vs. +10.3% expected. Although this was a bit of good news, it is worth pointing out that orders have rebounded from a very low base after falling by 14 and 17 percent in the previous two months, respectively. But first quarter GDP was left unrevised at -5% as expected.
So, heading into the US session, risk still remained off the menu and the dollar was near the day’s highs against a number of currencies. Will US investors be able to reverse this risk-off trade?
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