The Us dollar gathered strength in the last two trading sessions and continues to gain ground against other major currencies after FOMC statements and despite the higher unemployment applications.
Two days ago, the Fed decided to keep Interest rates low. While this was expected, most traders are looking to predict where the rates will be in the future and the projections for the economy. The statement had a hawkish tone which strengthened the dollar against most major currencies, and it
stopped the EUR from rallying. It made significant gains against the British pound.
The Initial Jobless Claims released by the US Department of Labor provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy. Generally speaking, a lower number should be seen as positive or bullish for the USD.
This time the jobless claims increased for the first time in 1 and a half months, layoffs are easing amid a reopening economy and a shortage of people willing to work. Usually, a higher jobless claim will depreciate the currency, and despite the higher than expected number, the dollar continued getting stronger as other data showed factory activity in the mid-Atlantic region continuing to grow at a steady pace in June, a measure of future production surged to its highest level in nearly 30 years.
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