The dollar surged forward on Thursday. Risk appetite dwindled today as markets waited for U.S. jobs data and new reports about fiscal aid negotiations in Washington.
On Wednesday, ISM data in the United States’ new service industry orders hit a record high. However, it also showed that hiring decreased, suggesting that a labor market recovery is being hindered.
Earlier the U.S. dollar tumbled down against a basket of currencies, reaching a two-year low of 92.495. Then it soared again, at last trading at 92.713.
Euro-dollar pair hit a two-year high of $1.1916 towards the end of the Asian session. But then it dropped back to $1.1876. PMI data boosted the common currency on Wednesday, as it showed that the eurozone economy is starting to expand.
Commerzbank analyst Antje Praefcke stated that the market is focusing on the positive news currently, and there seemed plenty of that during this week. It has therefore sold the greenback.
However, according to analysts, the damage has been extensive over the past weeks, shuttering the market’s confidence in the U.S. dollar’s role as a safe haven.
How did the Australian and New Zealand dollars fare?
The riskier Aussie and Kiwi soared overnight. But as the dollar started to recover, they tumbled down on Thursday.
The Australian dollar stood at $0.71905, lower by 0.1%, while the New Zealand dollar decreased by 0.2% at $0.6639.
On Thursday, Australia’s second-biggest city, Melbourne, began a six-week total lockdown, following a new surge of COVID-19 cases.
The Swedish and Norwegian crowns increased versus the greenback, the Swedish crown rising to its highest point since mid-2018.
However, the Swiss franc plummeted down against the euro, suggesting underlying market caution about an economic rebound in Europe.
Experts worried that stimulus measures to support the economy, such as unemployment benefits, are covering up the underlying damage to the economy. Meanwhile, traders are waiting for lawmakers to agree on a new package of government support for the United States.