All the actions and comments of officials of the Federal Reserve indicate that the economic recovery from coronavirus is not going as fast as we would like. Putting on a V-shaped recovery is at least a mistake, especially now that the number of infected people has begun to increase. People are talking about the second wave of the pandemic, but it is worth noting that the first one has not yet been overcome.
A dangerous increase in coronavirus diseases is observed in the United States, a worrying situation in Germany, a new outbreak in China. All this has cooled the ardor of investors who are now taking note of the real world situation and who previously ignored these risks.
Wall Street has been trading negative for the second day, playing back, among other things, the Fed's negative forecasts and Jerome Powell's pessimistic statements. This year, the fall in US GDP could reach 6.5%. Therefore, unemployment in the country will increase, despite all the encouraging results from drug developers against COVID-19. At this time, authorities and employers will try to find more effective methods of employment that will allow the use of a smaller staff.
The data on initial applications for unemployment benefits in the United States once again showed how long and time-consuming the process of economic recovery will be.
The number of applications for unemployment benefits in the US for the week decreased by only 58,000 and reached 1,508,000, the Ministry of Labor reported on Thursday. At the same time, the markets hoped for a more significant decrease in the indicator. According to their estimates, it was supposed to decrease by 242,000 to 1.3 million. Wall Street suffered another disappointment today, while the dollar perked up a bit.
Demand for protective assets grew, and the dollar, which has the status of a safe haven currency, received another chance for growth. But whether it will turn out to be used is not yet entirely clear. This week, the dollar index rebounded from lows, but you can't call this promising, since overall US economic data are recovering, like the stock market, despite the current correction.
Dollar growth is also limited by promises by the US monetary authorities to provide the economy with even more incentive to recover. The long-term outlook for the dollar remains negative, most investors get rid of positions to increase it.
Nevertheless, an upward trend is now taking place in the greenback. The dollar index crossed the border of 97.10, and thus an impulse to buy was formed.
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