Dollar continues rally for third day ahead of monthly job report

Economies.com
2020-04-03 12:07PM UTC

The US dollar rose against against a basket of its peers on Friday, to continue its rally for the third day, and hit a 1-week high as investors continued to hoard cash amid the ongoing liquidity crunch, ahead of the US monthly jobs report, as the US economy is expected to lose jobs at the worst pace since the 2009 global financial crisis due to the coronavirus impact. .

 

The dollar index rose more than 0.6% to the level of 100.78 points, the highest since March 26, and the level of opening trading today at 100.20 points, and recorded the lowest level at 100.14 points.

 

The dollar index rose 0.6% to the highest since March 26 at 100.78 points, after opening at 100.20 points, and hit today's low at 100.14, while it gained 0.5% yesterday, following the release of weak US jobless claims.

 

The US department of labor showed jobless claims rose 3.3 million to 6.648 million in past week, the all-time record.

 

The US dollar index has gained 2.5% so far during this week, to head for the third weekly gain in a month, due to high demand on the greenback amid a liquidity crunch.

 

Global markets are witnessing broad fears after US warned of higher deaths from the Covid-19 disease in the next couple of weeks.

 

President Donald Trump stressed on Tuesday the US will face "very, very painful two weeks," adding "this could be a hell of a bad two weeks, this is going to be a very bad two, and maybe three weeks like we’ve never seen before." 

 

Additionally, the Trump administration expects between 100,000 and 240,000 deaths amid the virus peak during the next week.

 

Worldwide coronavirus infections surpassed the 1 million cases barrier on Thursday, according to data by Johns Hopkins University, and the death toll rose to over 53,000 victims.

 

Investors are anticipating the release of key US data later today, as the payrolls report is expected to show the economy has lost 100,000 jobs in March, while average earnings are expected up 0.2%, and the unemployment rate is expected up to 3.8% from five-decade lows at 3.5%. 

 

Should the data show more severe impact from the coronavirus outbreak, this will trigger a massive sell-off of high-yield assets, led by stocks and bonds, and also will accelerate investors' fears of liquidity shortages, leading to higher demand for the greenback.

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