Forex Signals – Dollar Dips Amid Negative Rates Concerns –At 2:55 AM ET (0655 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 99.775, down 0.1%, while EUR/USD rose 0.1% to 1.0838 and GBP/USD pushed 0.2% higher to 1.2386. USD/JPY gained 0.1% to 106.41 – Forex – Dollar Dips
Thursday’s initial claims report revealed that 3.169 million Americans claimed unemployment last week, meaning more than 33 million have now filed for support since the coronavirus pandemic ripped through the economy.
This prompted the yield on the two-year Treasury to settle at a record low on Thursday, finishing the trading session at 0.129%, according to Tradeweb, down from 0.180% at Wednesday’s close.
Investors have started to price in the chance of the Federal Reserve cutting official interest rates below zero for the first time ever, with the January fed funds futures contract reaching a peak of 100.025 on Thursday in New York — a record high — indicating a policy rate of negative two and a half basis points.
Despite the U.S. Federal Reserve saying that it does not view negative rates as “appropriate”, a worsening economic downturn could force the Fed’s arm to expand its crisis response.
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That would be 27-times the worst monthly decline during the Financial Crisis and 11-times the record drop of September 1945, the demobilization of World War II, Bloomberg reported.
Elsewhere, the Turkish lira remains under pressure despite the country’s banking watchdog barred local lenders from trading lira with Citibank, BNP Paribas (OTC:BNPQY) and UBS, saying the three foreign banks failed to meet their lira liabilities. Forex – Dollar Dips.
At 2:55 AM ET, USD/TRY traded at 7.1493, up 0.5%, having reached 7.25 Thursday,