US dollar dives amid higher-than-expected jobless claims

US dollar dives amid higher-than-expected jobless claims. The U.S. dollar suffered substantial losses on Thursday as American jobless claims last week jumped more than expected to the highest level since 2021.-The dollar index, which measures the greenback against six major peers, sank 0.71 percent to 103.3473 in late trading.

Data released Thursday by the U.S. Department of Labor shows that initial jobless claims for the week ending June 3 surged by 28,000 to 261,000, well above the 2019 pre-pandemic average of 218,000. It marks the highest level for jobless claims since October 2021.

US dollar dives amid higher-than-expected jobless claims

“The sustained increase in weekly jobless claims from last year’s cyclical low is meaningful, clearly illustrating a softening in conditions,” said Jim Baird, chief investment officer with Plante Moran Financial Advisors.

 

US dollar dives amid higher-than-expected jobless claims

 

“That’s encouraging news for Fed policymakers who have been looking for evidence that the aggressive rate hikes of the past year are having an impact,” Baird added.While not considered a major indicator on a weekly basis in the Fed’s decision making, this week’s jobless claims will be one of the final economic data points for the Federal Reserve ahead of the Federal Open Market Committee (FOMC) meeting set to begin next Tuesday.

 

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As of Thursday afternoon, markets are pricing in a 71 percent chance that the Fed pauses its historic interest rate hiking campaign at that meeting, per the CME FedWatch Tool.Meanwhile, the U.S. Treasury yields swiftly pulled back with the 2-year briefly dipping below the 4.5 percent handle.

The week ahead is likely to remain relatively quiet as markets anticipate next week’s U.S. consumer price index and FOMC announcement which is sure to stir up some volatility.In late New York trading, the euro was up to 1.0779 U.S. dollars from 1.0703 dollars in the previous session, and the British pound rose to 1.2555 U.S. dollars from 1.2441 dollars in the previous session.

 

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The U.S. dollar bought 138.9410 Japanese yen, lower than 140.0830 Japanese yen of the previous session. The U.S. dollar was down to 0.8992 Swiss franc from 0.9095 Swiss franc, and it fell to 1.3359 Canadian dollars from 1.3371 Canadian dollars. The U.S. dollar fell to 10.8011 Swedish Krona from 10.8915 Swedish Krona.

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