Safe-haven status helps dollar when optimistic economic sentiment gives way as millions seek unemployment
The dollar gained after initial jobless claims for the week came in higher than expected. The euro is flat after the European Central Bank announces more stimulus and now expects the economy to contract by 12%. The British pound strengthens on potential Brexit delay. The Japanese yen strengthens in front of a 3-day holiday.
“Fortune sides with him who dares.”
April 30, 2020
EUR/USD 1.0849 GBP/USD 1.2497 USD/CAD 1.3911 AUD/USD 0.6506 USD/JPY 106.57 USD/CNH 7.0672 USD/ILS 3.4971 USD/MXN 23.91 USD/CHF 0.9721 USD/INR 75.10
The dollar gained on safe haven buying as weekly initial jobless claims released this morning showed 3.8M Americans as first-time filers. The number was worse than the 3.5M expected. Continuing claims came in at 18M which was better than the forecast of 19.5M. Personal spending in March sank 7.5% which was the worst fall since the data tracking began in 1959.GBP
The pound headed for more gains as financial markets begin to price in the possibility of Brexit being delayed. The UK had set a deadline of December 31 to have a new trade agreement negotiated with the European Union. Now with COVID set to shrink the UK economy the deadline may be pushed back.EUR
The euro is flat in volatile trading as Q1 GDP for the eurozone came in at -3.3% which was slightly better than expected. The European Central Bank met and announced no change to its benchmark interest rate (-0.5%). The ECB did hint at the possibility of additional measures. The Pandemic Emergency Purchase Program (PEPP), under which the ECB buys bonds, will likely be extended beyond 2020 and the limits on the amount of assets to be purchased may be eliminated.CAD
The Canadian dollar is slightly stronger as oil continues to rebound off historic lows.ASIA/PACIFIC
The Japanese yen strengthened for a 7th day in a row as the country prepares for a three-day holiday. Japanese financial markets will be closed May 4-6. Prime Minister Abe announced in a speech that the Japanese economy faces an unprecedented challenge as he extends the national emergency for another month.
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