Dollar hits 2-month high ahead of US unemployment claims

The US dollar rose against a basket of currencies on Thursday, to extend gains for the fifth straight day, attracting demand as the best alternative investment on liquidity crunch fears following the current sharp sell-off in most global stock markets, ahead of the US weekly jobless claims and the final part of the Fed Chair Jerome Powell's testimony before the US congress.

The dollar index rose by 0.2% to the highest since July 24 at 94.55 points, after it opened at 94.38, and hit an intraday low of 94.25.

The US dollar gained 0.4% yesterday, and posted its fourth straight daily gain, following weak data on the service sectors in the US and Europe, which raised concerns about the global economy.

The greenback shined as the best alternative investment due to growing concerns over the global economy, after a surge in coronavirus infections in Europe and the US, and some countries considering re-imposing another public lockdown.

Following these developments, most global stock markets saw a sharp sell-off, which renewed fears over a liquidity crunch of the US dollar.

Investors are anticipating the unemployment claims reading today, which is a key indicator of the US labor market, amid the latest developments in the coronavirus crisis and the rising infections in many US states.

At 12:30 GMT, the US economy will release the unemployment claims reading, with forecasts to reach 0.845 million during the week ending September 19 from 0.860 million in the previous week.

At 14:00 GMT, Federal Reserve Chair Jerome Powell is due to testify before the US Senate Banking Committee about the expected economic impact of the coronavirus pandemic.