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Jobless Claims Jump Doesn’t Stop Forex Market Move

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Jobless Claims Jump Doesn’t Stop Forex Market Move
  • New Unemployment Claims Rise Unexpectedly
  • Weak Dollar Continues as GBP Slips Back
  • US Markets Rise Again Amid Stimulus Hopes

There seems to be no end to the continuing push higher of the forex market. In particular, the US Dollar weakness is helping to support other major currencies around the world to seem strong. This is true certainly of the Euro and the GBP although the latter has slipped slightly today on a weakened Brexit deal hope. Not even an unexpected rise in new unemployment numbers though could stop the move out of the Dollar. Wall Street too continues in an optimistic vein, gaining more ground as hopes of a stimulus bill continue.

Jobless Numbers Higher Than Expected

The number of people filing first-time unemployment claims in the US increased this week stopping a downward trend as the battle against COVID-19 continues to intensify despite the roll out of vaccine doses have now begun. Analysts had predicted figures of just over 800,000 but were in fact as much as 10% out.

First-time claims charted 885,000 which is also the highest number since September. The numbers for last week highlight the ongoing issues that many states face as coronavirus restrictions are re-imposed in many states like New York. Almost 250,000 cases were reported in the country on Wednesday marking a huge number. In excess of 20 million Americans are also still in receipt of some form of unemployment benefit.

Move Away From USD Powers Through

The rising number of cases combined with even the surprising number of unemployment claims has done nothing to diminish the hopes of those forex trading away from the Dollar evidently. The currency has now reached its lowest point against the Euro since 2018 as stimulus hopes seem to keep the risk-on market sentiment intact.

This push has largely been beneficial to both the Euro and Pound in recent weeks and continues to be just that. With the Euro trading at above 1.22 there are still strong hopes that a stimulus bill will be passed soon. The Pound meanwhile slipped back slightly on the latest comments from Downing Street that indicate a deal is some way off.  Forex brokers though still found the pair trading strongly with many in the UK government hopeful of a deal by the end of the month final deadline.

US Stimulus Deal Edges Closer

With more than 12 million people set to lose unemployment benefits from December 26th if no action is taken, hopes are growing higher that a new round of stimulus will finally be agreed by the end of this week. The Senate leaders appear very close to pushing through a deal worth around $900 billion. Such a deal would also likely include a check to every individual American of $600 or more.

This has led US markets to forge ever higher today with the Dow Jones opening up more than 100 points. It will also extend the positive moves for many forex trading the USD for other major currencies like the Euro and Sterling.

 

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Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.

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