The US Dollar lost momentum against key rivals after the US Labor Department released data that was worse than expected. Analysts and economists had predicted that initial and continuing jobless claim benefits would show an improvement from previous periods. On Thursday, the data showed that initial claims rose to 851,000 for the week ended February 12th, while continuing claims came in at 4.494 million. Analysts had predicted a decline to 765,000 and 4.413 million, respectively; in both cases, the previous week's data was revised higher. That resulted in a shift of market sentiment as FX traders gauged whether their optimism over the US economic recovery was misplaced.
In Tokyo trading as of 10:55 am, the EUR/USD was trading at $1.2089, down 0.0099%; the pair has ranged from a peak of $1.20990 to a low of $1.20853 in today's session. The GBP/USD was lower at $1.3962, a loss of 0.0329%, off the session high of $1.39629. The USD/JPY was lower at 105.6800 Yen, down 0.01%.
Outlook for US Economy Shifts on Data
While analysts continue to paint an optimistic outlook for the US, especially given President Biden's assertion to push for a massive relief program coupled with aggressive vaccine roll out, the most recent data suggests that the greater likelihood is that the recovery will be uneven. They point out that the Federal Reserve continues to watch the labor data closely with a view to modifying monetary policy. One of the mandates that the Fed works toward is full employment; the second mandate is for price stability. .