Dollar falls before jobless claims, investors await stimulus

Thursday,   26-Mar-2020   09:14 AM (IST)

The dollar fell against the yen and the euro on Thursday before data expected to show a surge in U.S. claims for unemployment benefits as companies lay off workers due to the rapid spread of the coronavirus. The pound extended declines against the euro and the dollar due to worries that Britain is not prepared to deal with an increase in coronavirus cases after the flu-like illness ravaged health care systems in Italy and Spain. The Australian and New Zealand dollars, both of which are closely liked to the global commodity trade, fell against their U.S. counterpart as traders avoided taking on excessive risk. Investors are anxiously awaiting the passage of a $2 trillion U.S. stimulus package to offset the economic impact of the coronavirus pandemic, but there are already indications that some U.S. states will need more money for medical supplies as the health care system struggles to cope. The dollar fell 0.47% to 110.69 yen in Asia on Thursday. Against the Swiss franc , the dollar eased slightly to 0.9752. Sterling fell 0.3% to $1.1837 and fell 0.6% to 92.11 pence per euro. The pound's losses accelerated early in Asian trade after the British government said the total number of coronavirus cases in the UK rose to 9,529 on Wednesday from 8,077 the previous day. U.S. weekly jobless claims due later on Thursday are expected to rise to around a million, which would be well above the previous peak seen during the global financial crisis. Some analysts say jobless claims could even exceed one million as companies are expected to rapidly shed workers. Draconian restrictions on personal movement aimed at slowing the spread of the coronavirus are widely expected to cause a global recession. Federal Reserve Chairman Jerome Powell is scheduled to speak on U.S. television at 1100 GMT, which may provide more information about policymakers' response to the pandemic. Republicans and Democrats in the U.S. Senate are expected to vote on Wednesday on a $2 trillion emergency package that U.S. President Donald Trump is expected to swiftly sign the bill into law. The euro rose 0.2% to $1.0901 in Asia on Thursday. The common currency held on to gains against the Swiss franc, trading at 1.0638. The German lower house on Wednesday suspended the country's debt brake and approved a debt-financed supplementary budget of 156 billion euros to pay for healthcare and keep companies afloat.