- US Dollar Index slumps below 100 on Thursday.
- Initial Jobless Claims rose above 3 million in US.
- Third estimate of the Q4 US GDP growth remained unchanged at 2.1%.
The AUD/USD pair dropped to 0.5870 during the Asian session as risk-off, once again, started to dominate the financial markets. The broad-based selling pressure surrounding the greenback, however, allowed the pair to gain traction. As of writing, the pair was up 1.12% on the day at 0.6025.
DXY drops below 100
After erasing 0.8% on Wednesday, the US Dollar Index, which tracks the USD’s value against a basket of six major currencies, extended its slide and was last seen down 1% on the day at 99.93.
The data published by the US Department of Labor on Thursday showed that the Initial Jobless Claims in the week ending March 21 surged to 3,283,000 from 282,000. Despite this reading, US stock index futures turned positive on the day to suggest that investors haven’t read much into the data. Other data from the US revealed that the US Bureau of Economic Analysis’ third estimate of the fourth-quarter GDP growth remained unchanged at 2.1% as expected.
Commenting on the data, “today’s initial claims figure was at the upper end of the wide range of market expectations. In any case, it’s absolutely shocking to see 2% of the US labour force making jobless claims in a single week,” said Josh Nye, a Senior Economist at the Royal Bank of Canada.
Earlier in the day, FOMC Chairman Powell reiterated that the Fed still had policy room for further action to put additional weight on the USD’s shoulders.
Technical levels to watch for