Dollar Forex Market Weakness Presents Rebound Opportunity

• EUR and GBP both Push Back on Weaker Dollar
• US Jobless Numbers Beat Expectations
• Stocks Look for Positive Opening

The Dollar sold off in early trading to leave the rest of the forex market and major currencies on a stronger footing with their first opportunity to regain ground in recent weeks. This was much needed and taken advantage of by the Euro and Sterling, both of which moved higher to start the day. A 10-day low for the Dollar has coincided with an initial jobless claims number that again beat expectations to come in under 300,000. Wall Street will be hoping to seize on these positive notes as the early trading points to a positive opening bell.

Euro & Sterling Take Chance to Recover

It has been a torrid time for those forex trading both the Euro and Pound in recent weeks. Both had lost any of their prior momentum and were being fiercely held at lower and lower points by a surging USD, the Dollar Index at its highest point of the past 12 months earlier in the week. Both though have now grasped a moment of USD weakness to fight back strongly, recapturing key levels. 

For the Euro, that means being back above 1.16 while for the Pound that point is 1.37. Both had domestic reasons for positivity too notwithstanding the Dollar’s weakness. That positivity stems from increased optimism over Brexit with new proposals for change in relation to checks on goods from the EU entering Northern Ireland. Agreement here would solve an issue that has continued to upstage the Brexit agreement for some time. 

New Low for US Jobless Numbers

Analysts had expected that the number of initial jobless claims for the week in the US would come out at 318,000. Instead, this number has come up with a positive surprise to the downside. This is another pandemic-era low and marks the first time since March 2020 that the number was below 300,000 with a figure of 293,000 being released. 

As inflation worry persists, it remains to be seen how this number will be viewed, but it is a positive step back toward full employment nonetheless. Forex brokers and traders alike will also have been keeping a keen eye on the Producer Price Index Numbers. They have come in closer to expected at 0.5% with the expectations at  0.6%.

Wall Street Points to Strong Opening

Following on from more positive than expected data, Wall Street will be expecting a more positive day. That was already looking likely with early trading showing the Dow Jones 200 points up with better than expected earnings expected from a number of financial heavyweights including Bank of America, Morgan Stanley, and Wells Fargo.

The S&P 500 and NASDAQ both also look set for similar gains when the opening bell sounds. Presently, they are trading in positive territory by around 1% on both. COVID cases continuing to trend downward is also likely to assist reopening names.