U.S. Initial Jobless Claims Fall as Dollar Weakens Ahead of FOMC Decision

New applications for unemployment insurance in the United States dropped to 245K for the week ending June 14, according to the U.S. Department of Labor (DOL) on Thursday. This figure matched initial estimates and was a decrease from the previous week’s revised tally of 250K (revised from 248K).

The report also noted a seasonally adjusted insured unemployment rate of 1.3%, while the four-week moving average rose by 4.750K to 245.50K, up from the prior week’s revised average.

Additionally, Continuing Jobless Claims saw a decline of 6K, reaching 1.941 million for the week ending June 7.

U.S. Dollar Weakens Ahead of Federal Reserve Meeting

Despite the positive unemployment data, the U.S. dollar resumed its decline on Thursday, surrendering part of the strong recovery seen on Tuesday. This was largely due to lower U.S. yields across the curve and cautious market sentiment ahead of the Federal Open Market Committee (FOMC) meeting later in the day.

The U.S. Dollar Index (DXY) failed to retest the critical 99.00 barrier, slipping back into the mid-98.00s following the release of the unemployment claims data. Investors are maintaining a watchful stance ahead of the Fed’s decision, with expectations focused on any shifts in monetary policy or guidance that may impact the broader economy.

Outlook

The drop in initial jobless claims is seen as a positive sign for the labor market, but the continued weakness in the U.S. dollar suggests that markets are still anticipating a dovish stance from the Federal Reserve. Investors will be closely monitoring the FOMC meeting for any indications of future interest rate cuts or other measures that could influence the dollar and broader financial markets.