US Initial Jobless Claims Preview: Lower claims, higher dollar

Initial jobless claims expected to edge down from pandemic low. Dollar has stabilized after falling for three weeks and will respond to better or worse claims. Lower claims is a sign of economic acceleration and, therefore, USD would advance, FXStreet’s analyst Joseph Trevisani reports.

Key quotes

“Initial jobless claims in the week of August 7 are forecast to fall to 1.140 million continuing the improvement that began with the prior week’s drop to 1.186 million, the lowest since the pandemic began in March while continuing claims are predicted to decrease to 15.898 million from 16.107 million the previous week, also the pandemic low.”

“Covid-19 cases, hospitalizations and fatalities are in decline in almost all of the states. Manufacturing businesses are fielding the highest levels of new orders in a year-and-a-half. The service sector which comprises about 85% of US economic activity had a record level of incoming orders in July. A logical response to such business conditions would be to rehire workers.”

“The risk to the claims number especially after the unexpected improvement last week to is to the downside. If initial claims begin to fall the dollar and US economic prospects will surely rise.”