Dollar Loses Ground After ECB Increases Size Of Bond-buying Program

The U.S. dollar exhibited weakness on Thursday after showing some strength in the European session amid rising tensions between the U.S. and China.

The European Central Bank’s move to increase the size of its asset-buying program by 600 billion euros, from the current size of 750 billion euros, boosted risk sentiment and lifted the euro to a three-month high against the greenback.

The dollar index, which dropped to a low of 96.57, was last seen at 96.76, down by about 0.55% from previous close.

A report released by the Commerce Department today showed the U.S. trade deficit widened by slightly more than anticipated in the month of April.

The report said the trade deficit widened to $49.4 billion in April from a revised $42.3 billion in March. Economists had expected the trade deficit to widen to $49.0 billion from the $44.4 billion originally reported for the previous month.

The wider trade deficit came as the value of exports plunged by 20.5% to $151.3 billion, while the value of imports tumbled by 13.7% to $200.7 billion.

According to the data released by the Labor Department, first-time claims for U.S. unemployment benefits pulled back further off their recent record high in the week ended May 30th, tumbling to 1.877 million, a decrease of 249,000 from the previous week’s revised level of 2.126 million.

Economists had expected jobless claims to slump to 1.800 million from the 2.123 million originally reported for the previous week.

Jobless claims pulled back further off the record high of 6.867 million set in the week ended March 28th, although the number of new claims since the coronavirus lockdowns now exceeds 42.6 million.

Revised data released by the Labor Department on Thursday showed U.S. labor productivity declined by much less than initially estimated in the first quarter.

Traders were looking ahead to the Labor Department’s closely watched monthly jobs report on Friday.

Economists currently expect employment to tumble by about 8.0 million jobs in May after plunging by 20.5 million jobs in April. The unemployment rate is expected to jump to 19.8% from 14.7%.

The material has been provided by InstaForex Company –