© Reuters. FILE PHOTO: US dollar banknotes are shown in this illustration taken on February 14, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
By Gertrude Chavez-Dreyfus
NEW YORK (Reuters) – The dollar fell against some major currencies in thin trade on Thursday, as investors consolidated positions and pondered how pivotal US jobs data released in the stock trading holiday could influence Federal Reserve policy and trigger a possible market reaction.
The US stock market is closed on Good Friday, and some European countries are closed on Mondays as well.
The closely watched US nonfarm payrolls report on Friday, when many markets around the world are closed, will follow disappointing manufacturing and services sector data from the Institute for Supply Management (ISM) and private employment figures on Wednesday.
In afternoon trade, the US dollar, which hit a two-month low this week, in part due to lower Treasury yields, fell 0.1% to 101.81.
Thursday’s preliminary US jobless claims report added fuel to the slogan of a slowing economy. The data included revisions to previous figures after the government updated the model it uses to adjust the series for seasonal fluctuations.
Initial claims for state unemployment benefits fell by 18,000 to a seasonally adjusted number of 228,000 for the week ending April 1st. But the data for the previous week has been revised to show 48,000 more applications were received than previously reported.
In addition, the number of people receiving benefits after an initial week from Help, an employment proxy, increased by 6,000 to 1.823 million during the week ending March 25.
“The (initial claims) reviews paint a different picture from the beginning of the year, compared to what we thought then was the job market doing well,” said Amu Sahota, CEO of San Francisco-based FX advisory firm Klarity FX.
“Now they are showing consistently higher claims. That shows more moderation in the economy. The mood has weakened a bit and overall the soft landing scenario is not a reasonable expectation at the moment,” he added.
While a series of sluggish economic data has caused traders to cut their bets on how long US interest rates will need to remain in restricted territory, it has simultaneously rekindled concerns about recessionary risks.
Analysts said that the economic recession in the United States may be beneficial to the dollar.
“It is likely that a net and net recession will be more supportive of the dollar because the impact of the recession will not only be in the US, but will be global,” Klarity’s Sahota said.
Focus now turns to the US Employment Report.
Economists polled by Reuters expect non-farm payrolls to have grown by 239,000 in March, after February’s gain of 311,000. The non-farm payroll number was far more likely to present upward surprises than the failures of the past year or two.
For the markets that are open on Friday, this could lead to a very volatile session.
Graphics – surprise me
https://www.reuters.com/graphics/ECONOMY-SURPRISE/xmpjkjkorvr/chart.png
The harsh US economic signals have reinforced the view that the Fed will reverse course when raising interest rates.
US interest rate futures markets are currently pricing in a roughly equal chance that the Fed will leave rates unchanged at its next meeting, with multiple rate cuts priced in by the end of the year.
The dollar rose against the Japanese yen by 0.4% to 131.765 yen.
Meanwhile, the risk-sensitive Australian and New Zealand dollars fell 0.7% to $0.6679 and 1.1% to $0.6251, respectively.
The British pound fell 0.1% to $1.2451, while the euro rose 0.2% to $1.0931.
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Coin bid prices at 3:05 PM (1905 GMT)
Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid
previous change
a class
Dollar Index 101.8300 101.8700 -0.03% -1.604% +102.1300 +101.7500
EUR/USD 1.0928 USD 1.0908 + 0.20% + 2.01% + 1.0938 USD + 1.0885 USD
USD/JPY 131.7900 131.3300 +0.36% +0.53% +131.9000 +130.7850
EUR/JPY 143.99 143.11 +0.61% +2.63% +144.0000 +142.5600
USD/CHF 0.9046 0.9066 -0.27% -2.22% +0.9074 +0.9036
GBP/USD $1.2450 $1.2463 -0.08% + 2.97% + $1.2487 + $1.2413
USD/CAD 1.3474 1.3457 +0.12% -0.56% +1.3505 +1.3447
AUD/USD 0.6678 USD 0.6722 -0.65% -2.02% + 0.6725 USD + 0.6654 USD
EUR/CHF 0.9886 0.9888 -0.02% -0.09% +0.9890 +0.9852
EUR/GBP 0.8775 0.8749 +0.30% -0.78% +0.8785 +0.8740
NZD/USD 0.6251 USD 0.6317 -1.06% -1.57% + 0.6324 USD + 0.6240 USD
Dollar / Norway 10.4280 10.4500 -0.19% +6.28% +10.4810 +10.4150
Euro / Norway 11.3988 11.3710 +0.24% +8.63% +11.4210 +11.3588
USD/Sweden 10.4177 10.3912 +0.35% +0.10% +10.4712 +10.3668
Euro / Sweden 11.3849 11.3449 +0.35% +2.12% +11.4055 +11.3450
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