Fear for dollar’s value as coronavirus job stats due

David Hobart

A run of good luck for the US dollar appeared to come to an end on Thursday as the currency plummeted in the wake of impending bad news about employment.

The currency was down in its pairs against the Japanese yen and the single European currency after traders braced themselves for what was likely to be news that firms in the country had laid off members of staff.

The figures are due out later on Thursday and are expected to make for grid reading.

While analysts appeared to be confident that the problems were priced in by the markets already to some degree, there was also an acknowledgement that the picture is unclear.

Overall, it is believed that joblessness claims in the US are expected to go above 1m.

If this transpires it will be even higher than the numbers during the financial crisis.

However, there may be some light at the end of the tunnel after the country’s Senate announced that it had approved a stimulus package which included unemployment relief.

It came after days of wrangling in the upper house of Congress.

For the greenback, however, the fears meant a decline in various pairs.

It was down by almost 0.5% in its pair with the Japanese yen, which is known among forex traders for being a “safe haven” currency during times of market turmoil.

It reached 110.69 yen in this pair at one stage as trading got underway in the markets on Thursday morning.

As data on the website of the broker City Index showed, the dollar was also down somewhat in its pair against the Swiss franc.

In this particular pair, the dollar was noted at 0.9752 at one stage.

The issue of unemployment benefits has reared its head in other countries in the last few days too.

In the UK, for example, it was revealed this week that a high number of people had applied for Universal Credit – one of the British government’s welfare systems.

It is expected that later on Thursday there will be a bailout package for self-employed people revealed by the country’s Chancellor, Rishi Sunak.

This comes after a similar package was revealed for employed people when the crisis first began.

The main coronavirus-related challenge for Britain at the moment, however, appears to be healthcare.

There is a suspicion among some with knowledge of the system that the National Health Service in the country might not be able to cope with what is expected to be a rush of cases.

Over the course of Wednesday alone, the number of confirmed cases leapt to 9,529 from the figure of 8,077 the day before.

The British pound bore the brunt of this problem and went down in its pair against the greenback by 0.3%.

It reached $1.1837 at one point.

It was in its pair against the euro, however, that it was really hit.

In that pair it was spotted at 92.11 at one stage over the course of the day.

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David Hobart
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