(New York) The dollar fell sharply on Thursday against other major currencies, as the increase in the number of jobless claimants in the United States may encourage the Federal Reserve (Fed) to be flexible in order not to penalize the economy , which makes the greenback less attractive.
Around 4:45 p.m. (Eastern Time), the greenback lost 0.77% to 1.0781 dollars for one euro and 0.96% to 1.2558 dollars for one pound.
Between May 28 and June 3, 261,000 people registered to receive unemployment benefits, the highest since October 2021, and far more than analysts expected.
With the Fed currently seeking a balance between its fight against inflation and the risk of weighing on economic activity, this increase could make it more cautious at its meeting on Tuesday and Wednesday.
Today’s figures “fuel hopes that the Fed will take a little longer break from rate hikes,” said IG analyst Chris Beauchamp.
But for Edward Moya of Oanda, “the euro’s gains may not prove sustainable after weaker-than-expected data revealed the eurozone economy fell into technical recession.”
The euro zone entered a technical recession at the start of the year with a decline in GDP for two consecutive quarters, of 0.1% between January and March 2023, after a drop of the same magnitude from October to December, according to Eurostat.
The Swiss franc rose particularly, by 1.27% to 0.8993 Swiss francs for one dollar and by 0.44% to 0.9695 Swiss francs for one euro.
Swiss central bank chief Thomas Jordan told a conference that inflation was “more persistent than expected” and said the current Swiss rate was “relatively low”, hinting at possible hikes to come.
Finally, the yen gained 0.87% to 138.92 yen per dollar.
The currency benefited from the growth of Japan’s Gross Domestic Product (GDP), which was revised up to 0.7% over a quarter.
And, particularly important for forex traders, “Japan’s trade surplus was larger than expected, with exports up and imports down,” noted CBA analyst Kristina Clifton.
Kit Juckes, analyst at Societe Generale, after these positive data, “there must be a chance that the Bank of Japan plans to amend a little” its measures of control of the bond market, which are part of its policy arsenal. ultra-flexible monetary policy and which weigh on the yen.
The institution’s new governor, economist Kazuo Ueda, has repeatedly asserted that the current monetary course is appropriate for now.