Dollar gains on euro, yen while pound rebounds
The dollar climbed toward a fifth straight daily gain on Thursday on confidence in the U.S. economic outlook and the possibility that Friday’s jobs report will be stronger than expected.
The U.S. dollar index rose 0.5% in New York afternoon trading to 91.509, up 1.7% for the year and its highest level in two months.
The move came with a 0.6% decline in the euro, which fell to $1.1966, below what had seemed a resistance level of $1.20 earlier this week. It was its first move below $1.20 since Dec. 1.
The dollar also gained 0.4% against the yen, rising to 105.53, the highest level since Nov. 11.
After the dollar index lost 7% last year, its gains since December have come on short covering and a view that the U.S. economy’s recovery from the COVID-19 pandemic will be stronger than in other countries.
That view was reinforced on Thursday when the U.S. government said the number of Americans filing new applications for unemployment benefits decreased last week.
Initial claims for state unemployment benefits totaled a seasonally adjusted 779,000 last week, better than economists had forecast and better than 812,000 in the prior week. The government will release on Friday its payroll job count for January, and economists are expecting a gain of 50,000 after a December decline of 140,000.
The dollar’s move came as longer-term U.S. Treasury yields rose on Thursday as investors positioned for a large pandemic relief package from Washington and a stabilizing U.S. labor market.
Longer-term U.S. Treasury yields rose as traders positioned for a large stimulus package from Washington. The 10-year yield was up one basis point in afternoon trading at 1.14% and at one point reached 1.16%, its highest since Jan. 12.
Cryptocurrency ethereum, which had gained 10% on Wednesday, slipped as much as 1% on Thursday after reaching an all-time high of $1,698.56 ahead of the launch of ethereum futures on the Chicago Mercantile Exchange next week.
Bitcoin was also off 1% on Thursday at $37,320.
Cryptocurrencies are gaining traction with more mainstream investors and their total market value topped $1 trillion for the first time in January.
Treasury yields climb after better-than-expected jobs data
U.S. Treasury yields continued to climb on Thursday morning, as investors watched for progress on an economic relief plan, and also following better-than-expected private jobs data.
The yield on the benchmark 10-year Treasury note rose to 1.139%,, while the yield on the 30-year Treasury bond advanced to 1.935%. Yields move inversely to prices.
Reference: CNBC
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