Dollar Firms Up Against Rivals On Recovery Hopes
The U.S. dollar firmed up against its peers on Thursday, rebounding from near two-year lows, amid hopes economic recovery will gradually gain momentum this year.
Data from the Labor Department showed initial jobless claims in the U.S. edged down to 787,000, a decrease of 3,000 from the previous week’s upwardly revised level of 790,000. Economists had expected jobless claims to rise to 800,000 from the 787,000 originally reported for the previous week.
A report from the Commerce Department showed U.S. trade deficit widened to $68.1 billion in November from $63.1 billion in October. Economists had expected the deficit to widen to $65.2 billion.
On the political front, the Electoral College today certified President-elect Joe Biden’s victory. With the Democrats winning Georgia’s Senate runoff elections, they now get control of the House, Senate and the White House, making it easy for Biden to push through stimulus plans.
The dollar index rose to 89.97 by mid-morning, and despite paring some gains subsequently, managed to hold well above the flat line. It was last seen at 89.82, up 0.32% from previous close.
Against the Euro, the dollar firmed up to $1.2274, gaining 0.44%. Eurozone’s harmonized consumer price index, or HICP, dropped 0.3% year-on-year, same as in November. The core CPI, which excludes prices of food, energy and alcohol & tobacco, rose 0.2% year-on-year, same as in November. That was in line with economists’ expectations.
The Pound Sterling weakened, fetching $1.3570 per unit, less than $1.3610 a unit on Wednesday.
The Yen weakened to 103.82 a dollar, sliding from 103.06 a dollar.
The Aussie was down more than 0.4% against the dollar with the AUD-USD trading at 0.7769.
The Swiss franc weakened to 0.8851 a dollar from 0.8785. Preliminary data from the Federal Statistical Office showed retail sales adjusted for sales days and holidays rose by 1.7% in November from a year ago.
On a monthly basis, seasonally adjusted retail sales in Switzerland fell 2% in November. In nominal terms, retail sales grew 1% annually in November and decreased 2.4% from a month ago.
The Loonie was at C$1.2680 a dollar, down slightly from Wednesday’s close. Data from Statistics Canada showed Canada’s trade deficit narrowed to C$ 3.34 billion in November of 2020 from a downwardly revised C$ 3.73 billion in the previous month. Exports increased 0.5% to C$ 46.76 billion, while imports were down by 0.3% at $ 50.10 billion.