The US Dollar Index struck a 2-year trough as concerns grow that the US economy will be unable to overcome what seems to be the inevitable resurgence of Coronavirus cases. The latest data on the labor front showed initial unemployment claims for the week ended July 27th showed an unexpected increase to 1.416 million against an expected 1.3 million. To analysts that suggests that recovery in the US labor market may have stalled. The US Dollar Index, considered a measure by which FX traders gauge the greenback's relative strength, was trading lower at 94.67 .DXY, a loss of 0.03%. Elsewhere, the Euro has seen five consecutive days of gains against the greenback, largely on news that the EU approved a recovery fund to aid consumers and businesses impacted by Covid-19.
As of 10:03 am in Tokyo, the EUR/USD was trading higher at $1.1615, a gain of 0.1751% and off the session peak of $1.16174. The GBP/USD was also higher at $1.2758, up 0.216%, with the pair ranging from a low of $1.27274 to a high of $1.27616. The USD/JPY was lower at 106.5210 Yen, a loss of 0.29%.
Aussie and Kiwi Dollars Bounce
The Australian Dollar gained lost ground against the greenback even as concerns of escalating tensions between China and the US weigh on sentiment. The AUD/USD had struck a 15-month peak while the New Zealand Dollar hit a 6-month high against the US Dollar. Both the AUD/USD and NZD/USD were able to bounce back after an earlier retreat. The AUD/USD is higher at $0.7121, a gain of 0.3594% while the NZD/USD is at $0.6652, up 0.3424%. Analysts say that FX traders are worried about the form of China's retaliatory threat; Beijing had issued a statement regarding the closure which was short on details.