The U.S. dollar is on the offensive for a second straight day, gaining versus most of its major counterparts overnight.
Overview
The dollar gained yesterday on widespread risk aversion and continued the trend overnight as Asian equities fell. European equities rose slightly, however.
Traders are squarely focused on this morning’s weekly jobless claims report. Indeed, the print has been the largest fundamental release every week for the past month. Initial jobless claims came in at 5.245 million, up from an estimate of 5 million. In a nutshell, more than 22 million people have filed for unemployment protection in the past four weeks, wiping out all the job gains since the end of the 2009 financial crisis.
A separate report showed the Philly Fed survey dropped to -56.6 from an estimate of -3.0. estimate. Housing starts and building permits were also more terrible than estimated by economists.
Fed watchers will also be busy today as there are no less than six Federal Reserve Presidents speaking throughout the day.
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EUR
The Euro continued yesterday’s fall against the U.S. dollar even as European equities ticked slightly higher. The Stoxx Europe 600 index has gained six out of the last seven days as Europe looks to partial reopening in the coming weeks. German Chancellor Angela Merkel released tentative plans to reopen Europe’s largest economy. We continue to contend that if Europe is able to open up for business before the United States, the Euro could find some support over the medium term.
CAD
The Canadian dollar had a rough day versus the greenback yesterday, falling over 1.5% as the price of crude oil fell to the lowest level since 2002. Yesterday morning, the Bank of Canada announced new monetary stimulus measures, which met the expectations of most market participants. The loonie is recouping some of those losses today as the price of crude traded back above $20 a barrel.
