Pound jumps 2% vs US dollar as US jobless claims spike
Philip McHugh March 27th 2020 - 2 minute read
- Lack of BoE action sees pound pushing higher
- US dollar slumps thanks to major jump in US jobless figures
- Canadian dollar shakes off oil price decline
Pound picks up as BoE remains on hold
As the Bank of England (BoE) opted to leave interest rates on hold at their official March meeting the mood towards the pound picked up.
Although their latest set of meeting minutes highlighted the severity of the economic slowdown likely facing the UK this failed to weigh on investor sentiment.
A significant decline in the US dollar also supported GBP exchange rates before the weekend, allowing the pound to strengthen by more than 2% against the US dollar.
However, lingering anxiety surrounding the Covid-19 crisis could still see the pound fall out of favour again in the days ahead.
Surge in US jobless claims fuel US dollar losses
The US dollar plummeted on Thursday as the latest initial jobless claims figure far surpassed market forecasts.
The US labour Department reported that claims for unemployment benefits surged by a whopping 3.2 million last week, absolutely dwarfing the previous record of 700,000 weekly claims and weighing heavily on USD exchange rates.
The massive increase came as Americans were hit by widespread layoffs due to the disruption caused by the coronavirus and stoked fears that the US is headed for a deep recession.
It’s safe to assume that markets will continue keeping a close eye on coronavirus developments through today’s session.
This could prove most negative for the US dollar as the US now wrestles with the world’s largest coronavirus outbreak.
Euro benefits from declining infection numbers in Italy
The euro edged higher on Thursday as it was supported by the continued fall of new cases of coronavirus infection in Italy.
The common currency may continue creeping higher before the weekend if coronavirus headlines emerging from Europe point to a falling infection rate.
Upcoming Data:
Friday, 27th March 2020
12:30 USD Personal Consumption Expenditure Core
15:00 CAD Budget Balance
Written by
Philip McHugh