Dollar Crumbles as US Jobless Claims Skyrocket

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.

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Lukman Otunuga

Lukman Otunuga is a research analyst at FXTM. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in the various factors affecting the currency and commodity markets. Lukman provides in-depth analysis on the global currency and commodity markets and is often quoted by leading international media outlets such as: MarketWatch, CNBC, NASDAQ, Reuters, AFP, The Guardian and Yahoo. Prior to joining FXTM, Lukman spent two years as a research analyst with international currency broker FXCM, where he focused on a technical and fundamental analysis of the global currency, commodity, and stock markets. Lukman was also responsible for leading educational seminars for international and local high net worth individuals, and has published a series of educational articles on forex trading with City A.M. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance, where he studied corporate finance, mergers & acquisitions and the role of international financial institutions