Loonie falls to eight-day low

Key Movers

The US dollar is struggling to maintain stability as it faces difficulties, despite a modest recovery on Wednesday. The US dollar was able to perform better than its rivals during the European trading session due to an increase in risk aversion. The dollar index (DXY) remains under 102.00. Data released today by the US Department of Labor showed the number of people filing for unemployment benefits was 245,000 for the week ending on April 15^th. This figure came in higher than the previous week's revised print of 240,000 and exceeds the market forecast of 240,000. The Federal Reserve Bank of Philadelphia's manufacturing survey reported a decline in the diffusion index for the current general activity to -31.3, down from -23.2 in March. Today's reading was lower than the market's anticipated value of -19.2 and represents the lowest reading since May 2020.

The euro has managed to regain momentum as it trades above the 1.0950 level. The EUR/USD pair is seeing support as the USD has come under selling pressure following the release of poor economic data. According to Reuters, the minutes of the European Central Bank's (ECB) policy meeting in March, indicate that a significant majority of the Governing Counsel supported Chief Economist, Phillip Lane's, proposal to increase rates by 50 basis points. The Eurozone trade balance for February came in at a surplus of 4.6 billion following the previous reading of -30.6 billion and exceeding the market forecast of -22.8 billion. Later today the minutes of the previous ECB meeting will be released followed by an appearance by ECB member, Isabel Schnabel.

After dropping to 1.2400 earlier in the day, the pound has rebounded to around 1.2450 against the USD. The greenback continues to weaken following today’s disappointing data releases, enabling the pair to minimize its losses. The increase in inflows for the sterling can be attributed to the possibility of the Bank of England raising rates beyond previous expectations. However, this uptrend may be short-lived because of heightened prices for both households and businesses.