Dollar Exhibits Weakness

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The U.S. dollar was weak against some of its peers on Thursday, with a slew of economic data from around the world setting the trend.

Traders were also focusing on developments with regard to a potential new coronavirus relief package in the U.S., updates on Brexit and coronavirus cases.

Data from the Labor Department said initial jobless claims in the U.S. fell to 837,000 in the week ended September 26th, a decrease of 36,000 from the previous week’s revised level of 873,000. Economists had expected jobless claims to dip to 850,000 from the 870,000 originally reported for the previous week.

The Commerce Department’s report showed a steep drop in U.S. personal income in the month of August, with the sharp pullback reflecting a decrease in unemployment insurance benefits.

The report said personal income tumbled by 2.7% in August after rising by an upwardly revised 0.5% in July. At the same time, the report said personal spending climbed by 1% in August after jumping by a downwardly revised 1.5% in July.

The Institute for Supply Management’s report showed a modest slowdown in the pace of growth in manufacturing activity in the month of September. The ISM said its purchasing managers index edged down to 55.4 in September after rising to 56.0 in August. While a reading above 50 still indicates growth in the manufacturing sector, economists had expected the index to inch up to 56.3.

The dollar index, which dropped to a low of 93.53 earlier in the day, rose to 93.81 in late morning trades, but retreated a bit subsequently. It was last seen at 93.73, down 0.17% from previous close.

Against the Euro, the dollar weakened to $1.1771 before regaining some lost ground. It was hovering around $1.1745 a little while ago, compared to Thursday’s close of $1.1722.

IHS Markit’s final Manufacturing Purchasing Managers’ Index climbed to 53.7 in September from August’s 51.7, in line with an earlier flash reading and its highest level since August 2018.

Eurozone’s unemployment rate rose for a fifth consecutive month in August, Eurostat said. The seasonally adjusted jobless rate rose to 8.1% from 8% in July, which was revised from 7.8%. The latest rate was in line with economists’ expectations.

Euro area producer prices continued to fall in August, though the pace of decline slowed more-than-expected, preliminary data showed.

The Pound Sterling was weaker, fetching $1.2885 a unit after having firmed up to $1.2979 earlier. The UK manufacturing sector continued its recovery from the coronavirus-induced economic slump in September, but the pace of growth was slightly less than initially estimated, survey data from IHS Markit showed on Thursday.

The Yen was lower by about 0.1% at 105.55 a dollar, after falling to a low of 105.75 a dollar earlier. Large manufacturing in Japan weakened again in the third quarter of 2020, the Bank of Japan’s quarterly Tankan Survey on business sentiment showed with a diffusion index score of -27.

That was shy of forecasts for a reading of -23 as expectations were very soft because of the global Covid-19 pandemic. But it was up from a score of -34 three months ago.

The Aussie was stronger with the AUD-USD pair trading at 0.7183, up 0.3% from previous close.

The Swiss franc was gaining about 0.25% at 0.9186 a dollar, while the Loonie was up at 1.3287, against previous close of 1.3319 a dollar.

The Swiss consumer price index decreased 0.8% year-on-year in September, following a 0.9% fall in August. Economists had expected a 0.7% fall. On a monthly basis, consumer prices remained unchanged in August. This was in line with economists’ expectation.

Meanwhile, retail sales in Switzerland grew a working-day adjusted 2.5% year-on-year in August. On a monthly basis, seasonally adjusted retail sales fell 1.9% in August.

Survey data revealed that the Swiss manufacturing PMI rose to 53.1 in September from 51.8 in August. Economists had expected a reading of 54.0.

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