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The United States dollar weakened during the US session due to softer than expected manufacturing data and a rise in jobless figures, prompting fears that the Fed will not raise rates again.
Most of the action in the US dollar was focused on the majors as the EURUSD pair edged back towards the 1.1000 level and the NZDUSD pair recovered its losses after the soft CPI print this morning.
Breaking down the data, the Philadelphia Fed Manufacturing Index in the US fell to -31.3 points in April of 2023, the lowest since May of 2020 from -23.2 in March.
The release marks an eighth consecutive negative reading, missing market expectations of -19.2. Indicators for activity remained negative, but less than last month, namely new orders (-22.7 vs -28.2) and shipments (-7.3 vs -25.4).
The employment index suggests steady employment overall (-0.2 vs -10.3) while both prices paid (8.2 vs 23.5) and received (-3.3 vs 7.9) declined to their lowest levels since mid-2020. The future indicators suggest that firms’ expectations for growth over the next six months remain subdued (-1.5 vs -8).
On the jobs front, the number of Americans filing for unemployment benefits rose by 5,000 to 245,000 on the week ending April 15th, the most in one month and above market expectations of 240,000.
The result was in line with a batch of data for March that suggested some softening in the US labour market, breaking the long streak of data pointing to a tight labour market despite aggressive rate hikes by the Federal Reserve.
The four-week moving average, which removes week-to-week volatility, fell by 500 to 239,750. On a seasonally unadjusted basis, claims fell by 7,021 from the previous week to 228,216.
Continuing jobless claims in the US, which measure unemployed people who have been receiving unemployment benefits for a while, rose to 1.865 million in the week ending April 8th, up from a revised 1.804 million a week before and well above market expectations of 1.820 million. Continuing jobless claims hit their highest level since the week ending November 27th, 2021.
