The U.S. dollar initially headed for weaker levels against a basket of major currencies in Wednesday trading but rebounded from its three-month low in later hours. Investors are keeping a low hand in the Fed’s interest rate decisions.
The number of Americans applying for unemployment benefits increased again last week. Companies were wary of accelerating the spread of coronavirus disease again and thus proceeded to more massive layoffs. This only slows down the pace at which the labor market is reviving. The US dollar reacted to the combination of this adverse news, which weakened slightly in early Wednesday trading.
But it bounced back from the bottom, which also meant a three-month low for dollars against a basket of world currencies. Investors’ view of the dollar these days is largely influenced by expectations associated with the upcoming Federal Reserve’s Open Market Operations Committee (FOMC) meeting. Markets will be suspensefully waiting to see whether the Committee will keep interest rates at technical zero or whether it will dare to move them into negative territory.