Dollar Jumps Higher, Caution Is Returned To Currency Market

The dollar floated higher on Friday, helped by steady U.S. jobs data and firmer global demand for safe havens amid concerns about the coronavirus recovery, setting the currency up to snap a seven-week losing streak potentially.

Early moves in the Asia session were modest as traders awaited Chinese trade data due around 0200 GMT. A rise in industrial output and a substantial rebound in retail sales expected, and a downside surprise could hurt regional currencies.

The dollar traded firmly against the risk-sensitive Australian and New Zealand dollars, with the Aussie subdued after the central bank governor emphasized the long road back to recovery in testimony before parliament.

The Australian and New Zealand dollars

The Australia was last 0.2% softer at $0.7138 and has settled into a range around that level after pulling back from an 18-month high hit a week ago.

The New Zealand was under pressure at $0.6537 as the country faces a fresh COVID-19 outbreak and after the comments from the central bank this week. Other majors were generally flat, but the euro rised above $1.18.

New Zealand is due to announce that a lockdown in the country’s biggest city will be eased or extended on Friday.

Unemployment Rate

Overnight the weekly number of applications for jobless benefits in the U.S. slumped under one million for the first time ever since the start of the global pandemic, with 963,000 applications coming in beneath expectations for 1.1 million.

But above buying the dollar, any relief was shortlived, as some 30 million Americans are out of work. An aid package to keep the stimulus flowing in the economy has stalled in Congress.

Against a basket of currencies, the dollar remains 0.1% lower for the week, but it has arosed to arrest a slide that has it about 9.5% lower than its March peak.