The US Dollar is staging a comeback after being under broad pressure as hopes for a second stimulus package for a struggling US economy continue to fade. The outcome of the US Presidential election is still undecided, though analysts and financial markets are betting on a win for Democrat Joe Biden. As of now, Republicans will keep control of the US Senate. Democrats still have a chance to even the score after it was announced that a run-off election would take place in Georgia to decide the Senate seat there, as no party was able to achieve a 50% win. The high degree of uncertainty has market players waiting for more clarity from election officials; in the short term, analysts don’t foresee any major gains for the greenback.
In Tokyo trading as of 10:59 am, the EUR/USD was trading at $1.1815, down 0.1074% and moving away from the session high of $1.18477. The GBP/USD was priced at $1.3125, down 0.1347%; the pair has ranged from a low of $1.3115 to a high of $1.31613. The USD/JPY was higher at 103.6350 Yen, a gain of 0.03%.
US Unemployment Data Worse than Expected
In the US on Thursday, the US Labor Department reported that both initial and continuing claims for jobless benefits increased, respectively, to 751,000 and 7,285,000. Analysts missed the mark in both cases, forecasting a drop from the previous readings. The US Labor Department also reported that the previous readings were revised upward. Looking ahead, the NFP report for October is due out, with analysts calling for 600,000 new jobs, down from September’s 661,000. The labor data is closely monitored by the Federal Reserve Bank as it will impact monetary policy, given the Fed’s dual mandate of price stability and full inflation. The Fed Chairman, Jerome Powell, has already said that more stimulus needed to be provided in order to mitigate the damage being done to the economy at large as a result of the Coronavirus pandemic.