- US Jobless Numbers Drop as Euro Reach Highs
- Interest Rate Hold Helps GBP/USD
- Markets Wait on Stimulus Bill Update
Both the Euro and the Pound were given a timely boost against the US Dollar as unemployment numbers in the US came in much lower than expected. The number of new claims filed dropped almost 250,000. Sterling has been boosted further by the news that the Bank of England will leave interest rates unchanged for now. This positive news has not though impacted the opening on Wall Street as traders hold out for more news on the proposed stimulus deal.
Better Than Expected Unemployment Data Provides Confidence
Although unemployment numbers are still easily at record-setting numbers, there are continuing signs of movement in the right direction as the number of weekly claims has continued to trend downward, albeit against the expectations of analysts. They had forecast a figure above 1.4 million, though the number which came in is far below that at 1.186 million.
Continuing claims have also dropped by more than 800,000 and while there is still a great distance to go, traders and the forex market alike have been quick to take the positives from the situation. The EUR/USD market quickly moved to a new two-year high above 1.19 though this has since dropped back closer to 1.185 as many forex trading the pair await the outcome of the proposed second stimulus package for the US economy.
Pound Receives Boost from BoE
The Pound has been trading well in recent days, shaking off concerns over the stalling Brexit negotiations and a step back in the UK lockdown reopening process to gain further against a weakened US Dollar. It was further aided today by news that the bank will not move to negative interest rates at any time in the near future.
Although a positive message was taken by traders, and forex brokers noted an uptick in trading of the Pound, Bank of England Governor Andrew Bailey was also quick to warn that this should not be perceived as an optimistic outlook, and that the bank will continue to monitor developments closely. In other positive developments though, they also revised GDP projections to predict a 2020 contraction of 9.5% instead of the previously estimated 14%. This has all left the GBP/USD trading above 1.315, having hit a multi-month high.
Quiet Market Opening as Stimulus News is Awaited
Despite the drop in unemployment numbers, markets on Wall Street opened quietly on Thursday. This follows recent days of strong gains with the S&P 500 ending yesterday within 2% of its all-time high level.
Many traders are poised and waiting for further news on the new coronavirus stimulus package which has so far failed to overcome an impasse with lawmakers in Washington. It seems that several concessions have been made in a bid to get the package passed, though there still appears to be a gap between what is being proposed, and what some feel is appropriate.