Risk-off sentiment boosts U.S. dollar, pound drops
The dollar climbed on Thursday along with the safe-haven yen as signs the U.S. economy was stalling while fiscal stimulus appeared unlikely before the U.S. presidential election kept investors in a risk-off stance.
The dollar strengthened as U.S. equities dropped on the heels of data that showed the labor market recovery is losing steam, while manufacturing activity in New York fell more than anticipated.
Weekly jobless clams rose to 898,000, up 53,000 from the prior week and above the 825,000 estimate, increasing concerns the COVID-19 pandemic was causing lasting damage to the labor market.
After saying a stimulus deal before the Nov. 3 election would be hard, U.S. Treasury Secretary Steven Mnuchin said he will keep trying to reach a deal on coronavirus relief with House Speaker Nancy Pelosi before that date.
The dollar index rose 0.504% after touching a one-week high of 93.878.
The British pound, lifted on Wednesday by signs of progress in Brexit talks, relinquished those gains on Thursday as concerns about trade talks with Europe resurfaced and London faced tighter coronavirus restrictions.
Sterling was last trading at $1.2893, down 0.91% on the day.
While weaker against the dollar, the Japanese yen strengthened 0.30% versus the euro. Bloomberg reported the European Central Bank “sees little reason” to rush into a new stimulus this month even as coronavirus cases spike and the economy slows.
The euro was down 0.49% to $1.1688 against the greenback.
Reference: CNBC
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