Author Steven Oram
The number of Americans filing unemployment claims surged to a record 3.28 million overnight as state-wide lockdowns brought the economy to a halt and triggered millions of layoffs. The alarming number was still below the market worse fears of as high as 4 million, which has seen stock prices continue their recent bounce back.
US Dollar weakness has seen the Australian Dollar move higher overnight trading at its highest level in ten days. The Aussie surged up by around 2% from its opening levels yesterday at one point as weekly jobless claims in the US hit record highs. The NZD and GBP have also made similar gains vs the USD, while the Euro and Japanese Yen were also stronger overnight.
The US senate voted 96-0 to approve the $2 trillion fiscal package, which will now move to the House of Representatives to vote on, before President Trump rubber stamps it. The US economy has effectively fallen off a cliff and the government and Federal Reserve are pulling out all stops to keep things moving. This is contrast to China which appears to be coming through the other side with factories re-opening for business. The challenge for China is now that global demand has hit the wall with most trading partners facing significant economic downturns.
The British Pound continued to build on recent strength gaining 2% vs the US Dollar. Like most other stronger currencies, it was US jobless claims that was the main driver. Earlier in the day, the Bank on England said it was prepared to take further action to limit the economic fallout from the Covid-19 outbreak in Britain.
PM Scott Morrison at a special online summit with other G20 leaders agreed a deal to co-ordinate efforts to tackle the pandemic crisis. They pledged jointly $A7.5 trillion to kick start the ailing global economy.
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