The Dollar weakened against every single G10 currency on Thursday after terrible US economic data fuelled concerns over the health of the largest economy in the world.
Nearly 3.3 million Americans applied for unemployment benefits last week which was more than triple the previous record set in 1982 amid the widespread economic shutdown caused by the pandemic. These figures are certainly a shocking reflecting of how badly the coronavirus has hit theeconomy with the pace of layoffs expected to jump as the United States sinks into a recession. Dollar weakness could become a short term theme if economic data continues to paint a gloomy picture, despite the efforts of the Federal Reserve and Senate to promote stability.
Looking at the technical picture, the Dollar Index is under intense pressure on the daily charts with prices trading around 99.90. A solid daily close below this level could open a path towards 99.00.
Commodity spotlight – Gold
Appetite for Gold improved on Thursday after disappointing US economic data weakened the Dollar and fanned fears around the largest economy in the world entering a recession.
The precious metal has appreciated almost 5% since the start of the week and is positioned to extend gains on risk aversion. Technical traders will continue to closely observe how prices behave around $1630. A solid daily close above this point should open a path back towards $1675.