Forex – Dollar Edges Lower; Petro Currencies Gain on Trump Comments

 Forex – Dollar Edges Lower; Petro Currencies Gain on Trump Comments
imageForex21 hours ago (Apr 02, 2020 03:08AM ET)

(C) Reuters.

By Peter Nurse

Investing.com – The dollar edged lower in European trading Thursday, with investors seemingly prepared to move out of the safe haven into riskier currencies ahead of key U.S. unemployment data.

At 3 AM ET (0700 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 99.640, down 0.1%. EUR/USD fell 0.2% to 1.0939, while GBP/USD rose 0.3% to 1.2418. USD/JPY climbed 0.1% to 107.28.

The outbreak of the pandemic has caused developed economies to virtually close down as governments attempt social distancing policies to stem the spreading of the virus.

The starkest evidence of the economic damage caused came last week when weekly U.S. initial jobless claims, one of the earliest gauges of economic trends, jumped to 3.28 million, blowing past the previous record of 695,000 set in 1982.

This week’s numbers are released at 8:30 AM ET (1230 GMT), with another 3.5 million claims expected.

Obviously these are poor numbers, but if there can be a positive slant, it may be that a large number of claims means that displaced workers are availing themselves of the backstop support provided in the stimulus bill. That would keep much-needed disposable income in the economy.

Additionally, the price of oil climbed sharply Thursday after President Donald Trump stated late Wednesday that Russia and Saudi Arabia would make a deal to end their price war within a “few days”.

Global oil prices have fallen by roughly two-thirds this year, hitting hard the finances of the countries that depend on oil revenue for funding.

At 3:00 AM ET, USD/NOK traded 1.6% lower at 10.23.23, while USD/RUB dropped 1.4% to 77.63. Russia spent 5% of its reserves defending the ruble in the week to March 20. Data for last week are due later Thursday.

Some vulnerable emerging market currencies have come under extreme pressure recently as wide current account deficits, low credit ratings and limited foreign currency reserves heighten capital flight risks.

The South African rand hit record lows while the Turkish lira sank to a two-year low. Thursday’s more positive tone has allowed these to post small recoveries.

At 3 AM ET (0710 GMT), USD/ZAR traded 0.3% lower at 18.15 and USD/TRY was 0.5% lower at 6.6623.

Forex – Dollar Edges Lower; Petro Currencies Gain on Trump Comments

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