The U.S. dollar was mixed overnight, gaining only 0.1% as poor economic data abroad and a rally in energy prices pulling the greenback in different directions versus some pairs.
Overview
Weekly jobless claims were ugly again. 4.4 million Americans filed initial claims for employment protection last week. 26 million Americans have filed over the last five weeks, which remains hard to comprehend. As a result, the unemployment rate may rise to 20%, which would be almost double the worst rate of the Great Recession.
What to Watch Today…
- US PMI data at 9:45 a.m.
- New home sales at 10 a.m.
- Kansas City Fed April manufacturing print at 11 a.m.
Complete Economic Calendar can be found here.
You’re Invited Today…
THURSDAY | WEBINAR | Cocktails & Currencies @ 4pm EST
>> Submit an FX Question for our Traders before Happy Half Hour
EUR
The Euro came under heavy selling pressure overnight, with EUR/USD falling to the lowest level since earlier in April. Euro area PMI data showed that the private sector activity fell to 13.5 in April from 29.7 in March. 50 is the diving line between contraction and expansion. The drop was worse than most economist predicted and represents the worst reading on record. Some of the largest economies were among the worst hit with Germany’s PMI falling to 15.9 and France’s to 10.4.
The Euro was already on the backfoot after the European Central Bank announced measures to loosen collateral requirements to include debt that was recently downgraded in an attempt to stave off a liquidity crisis.
European leaders meeting today to (hopefully) agree on terms of a 2.2 trillion-dollar economic package to help the ailing economies.
GBP
The British pound has proved resilient and held on to yesterday’s gains despite a report that showed the U.K. economy shrank the most on record. IHS Markit’s Purchasing Managers Index for output fell to 12.9 from 36 in March, a similar drop to major economies in the Eurozone. Output is the worst in the twenty-year history of the report and shows a much deeper downturn that during the financial crisis.
