The US Dollar is poised to record a loss for the week and was on shaky ground in early Friday trade in Asia. That was as a result of the Federal Reserve Bank's announcement of a new lending program intended for small businesses. At the same time, signs that the spread of the Coronavirus might now be slowing lowered demand for safe haven currencies. Analysts remain cautiously optimistic however given how little is known about Covid-19 and because the economic impact that the disease will likely have on global economies is still unclear. News that the British Prime Minister was transferred out of the intensive care unit after his hospitalization for Coronavirus helped to push the Pound Sterling higher as FX traders breathed a sigh of relief.
As of 10:25 am in Tokyo, the USD/JPY was trading higher at 108.5060 Yen, up 0.03% and off the session peak of 108.619 Yen. The EUR/USD was lower at $1.0922, down 0.0229%; the pair has ranged from a low of $1.09173 to a peak of $1.09392. The GBP/USD was higher and trading at $1.2451, a gain of 0.0051%, off the earlier high of $1.24829.
North American Labor Market Hit Hard
On Thursday, the US Labor Department announced that the continuing claims for unemployment benefits was slightly better than expected at nearly 7.5 million; analysts had forecast a rise to 8 million. Surprising market players was the initial benefits claims which for the second week surged, this time to 6.6 million, against an expected decline to 5.25 million; the previous week's figures were upwardly adjusted to more than 6.8 million. Similarly dismal numbers were released for the Canadian labor market, with Statistics Canada reporting that the net change in employment was recorded at -1.01 million, against analysts forecasts of -350,000. The Canadian unemployment rate also jumped to 7.8% against a predicted rise to 7.2% (from 5.6%). The USD/CAD was trading at C$1.3995, up 0.17%.