Dollar Extends Slide Against Peers On Weak Economic Data

Dollar Extends Slide Against Peers On Weak Economic Data

The U.S. dollar drifted lower on Thursday, losing ground again other major currencies, hurt by data showing a record drop in U.S. Gross Domestic Product in the second quarter.

A report showing an increase in unemployment claims in the week ended July 25th contributed as well to dollar’s decline.

Data from the Commerce Department showed a record contraction in U.S. economic activity in the second quarter. The report said real gross domestic product plummeted at an annual rate of 32.9% in the second quarter following a 5% slump in the first quarter.

Data from the Labor Department showed that first-time claims for U.S. unemployment benefits increased for the second straight week in the week ended July 25th, although claims rose by much less than expected.

The report said initial jobless claims edged up to 1.434 million, an increase of 12,000 from the previous week’s revised level of 1,422,000.

Lack of progress in talks between the White House and Congress over a new coronavirus aid package was also weighing on sentiment.

The dollar index slipped to 92.94, losing about 0.55%.

Against the Euro, the dollar weakened to $1.1850, down nearly 0.5% from Wednesday’s close. Survey data from European Commission showed that Eurozone economic confidence improved to a four-month high in July as sentiment in industrial and service sectors strengthened amid the relaxation of coronavirus containment measures.

The economic sentiment index climbed to 82.3 in July from 75.8 in the previous month. The score was forecast to rise to 81.0.

The Pound Sterling was up nearly 0.8% with a unit fetching $1.3099, compared with $1.2977 yesterday evening.

The Yen was stronger at 104.72 a dollar, firming up from 104.92 despite a drop in retail sales in Japan. The data from the Ministry of Economy, Trade and Industry said retail sales in Japan were down 1.2% on year in June. That beat forecasts for a decline of 6.5% following the 12.3% drop in May.

Against the Aussie, the dollar was down marginally at 0.7196. The Swiss franc was stronger at 0.9089, up 0.4% from Wednesday, while the loonie weakened to C$1.3421, against the greenback, losing about 0.6%.