Jobless Claims Rise As U.S. Cities and States Combat Covid-19

OFX Daily Market News

Posted by OFX

USD – United States Dollar

North American equities posted their worst week since the global financial crisis with the S&P 500 falling to its lowest level in three years, ending the week 15 percent down. WTI is down 31.32 percent on the month, U.S. crude oil futures were down another 1.5 percent at $22.35 a barrel. This comes on the back of a flurry of emergency packages from G-7 central banks intended to buffer economies and financial markets against the global economic shutdown triggered by the coronavirus pandemic.
The U.S. faces a wave of jobless claims as states from Ohio to Pennsylvania saw a surge in the number of people who have been laid off in recent days, overwhelming state labor agencies as cities shut down to halt the spread of the coronavirus. A report last Thursday showed a steep rise in claims for unemployment insurance; 281k, up from 211k the previous week. The initial report means that the U.S.’s unemployment data due out early next month could weigh heavily on the economy and the USD.

Key Movers

Asian stocks Monday tumble and US S&P futures dropping 5 percent in the open, hitting another “limit down” amid a pick up on deaths from the virus and a lack of agreement by the U.S. Government on an Aid plan. The USD lost some ground against the JPY, EUR and GBP but is still trading very strong against emerging market currencies. NZD announced they’d start buying bonds to stimulate the economy, and the Indian rupee reached a new low against the USD after the country also announced a lockdown.
The traditional safe-haven Gold is losing out to the U.S. dollar as investors look for shelter from the virus-driven storm that has wreaked havoc over risk assets. With the USD soaring last week, Gold headed for its lowest close in three months. Some reasoning behind the fall is that investors are cashing-in from long positions built before the recent spike to be able to pay margin calls or losses in other assets.

Expected Ranges

EUR/USD: 1.0636 – 1.0806 ▲

GBP/USD: 1.1506 – 1.1731 ▲

USD/CAD: 1.4335 – 1.4491 ▲

AUD/USD: 0.5699 – 0.5842 ▲

NZD/USD: 0.5585 – 0.5738 ▲


Posted by OFX

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