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Dollar Gains Further Ground On Recovery Hopes

Dollar Gains Further Ground On Recovery Hopes

The U.S. dollar exhibited strength against its peers on Thursday, extending recent gains, amid continued optimism about a quick economic recovery.

Data from the Labor Department showed initial jobless claims fell to 779,000 in the week ended January 30th, a decrease of 33,000 from the previous week’s revised level of 812,000. Economists had expected jobless claims to edge down to 830,000 from the 847,000 originally reported for the previous week.

New orders for U.S. manufactured goods showed another significant increase in the month of December, according to a report released by the Commerce Department.

The report said factory orders jumped by 1.1% in December after surging up by 1.3% for three consecutive months. Economists had expected factory orders to climb by 0.7%.

The dollar index, which rose to 91.58, was last seen at 91.52, up nearly 0.4% from previous close.

Against the Euro, the dollar firmed up to $1.1966, gaining from previous close of $1.2035. Eurozone retail sales grew 2% month-on-month in December, in contrast to a fall of 5.7% in November, data from Eurostat revealed. Sales were forecast to grow 1.6%.

The Pound Sterling was stronger against the dollar, fetching $1.3671 a unit after closing at $1.3646 a day earlier. The Bank of England’s nine-member monetary policy committee headed by Governor Andrew Bailey voted to hold the interest rate at 0.1% and the quantitative easing at GBP 895 billion.

On negative interest rate, the MPC said it did not wish to send any signal that it intended to set a negative Bank Rate at some point in the future.

The BoE expects the UK economy to fall by around 4% in the first quarter of 2021, in contrast to expectations of a rise in the November Report. The bank lowered its forecast for the British economic growth for this year to 5% from 7.25% projected in November.

The Yen weakened to 105.54 a dollar, sliding from 105.03.

Against the Aussie, the dollar was stronger with the AUD-USD pair quoting at 0.7602 after settling at 0.7618 on Wednesday.

Australia had a seasonally adjusted merchandise trade surplus of A$6.785 billion in December. That exceeded expectations for a A$6.0 billion surplus following the downwardly revised A$5.014 billion surplus in November.

The Swiss franc was down at CHF 0.9901, losing nearly 0.6% from CHF 0.8991 a dollar. Data from State Secretariat for Economic Affairs showed the Swiss consumer confidence index declined to -14.6 in the first quarter of 2021, the weakest since the second quarter last year, from a revised -13.0 in the previous quarter.

The Loonie slid to C$ 1.2821 from C$ 1.2786, giving up about 0.27%.

The material has been provided by InstaForex Company – www.instaforex.com