The dollar index (which measures its value against a basket of 6 reference currencies) remained strong Thursday at 98.18 points (+0.01%). The greenback has returned to its highest level in two years as it benefits from a safe haven status, particularly as the US economy is still better than others during the global economic slowdown. In this context, the latest US indicators have emerged quite solid, even though new weekly jobless claims jumped 37,000 last week to 230,000, while the consensus forecast was 200,000. This is their largest increase since September 2017.
Durable goods orders, on the other hand, outpaced expectations in March, up 2.7% over one month, versus a consensus of +0.7% after a revised reading at -1.1% in February. Excluding transport this time, orders were up 0.4%, versus +0.2% consensus and -0.2% a month earlier.
The euro continued to fall (-0.17% to $1.1134), the lowest since 2017 against the greenback. The European currency is paying off in recent days amid disappointing European indicators, especially the ifo Business Climate Index announced Wednesday. This confidence index from the German business community fell to 99.2 points in April, against 99.9 expected and after 99.6 points in March. Thursday, the employment figures in Spain were also worried, the unemployment rate rising to 14.7% in the first quarter, against 14.5% consensus.
The euro has been plagued in recent weeks by a series of bad news for the euro zone economy, where major governments, as well as the ECB, the OECD and the IMF, have revised down sharply growth forecasts for this year.
Among other currencies, the yen gained 0.5% against the dollar despite the announcement by the Bank of Japan of a downward revision of its growth forecasts and its intention to keep interest rates very low. Krona also lost 1% against the dollar after the Swedish central bank said its rates would remain low for an extended period.
Elsewhere in the world, the announcement of an unexpected contraction of the South Korean economy in the first quarter also weighed on investor sentiment. South Korea’s GDP thus fell by 0.3% compared to the fourth quarter of 2018, mainly due to a drop in exports. Seoul had not experienced such disappointing growth since the 2008 financial crisis. South Korean won 0.9% against the dollar.