Forex News

USD/JPY rebounds above 107.50 as Wall Street gains traction

  • Major equity indexes in the US trade in positive territory.
  • US Dollar Index climbs above 100 in American session.
  • Initial Jobless Claims in US surged to fresh record high above 6 million.

The USD/JPY pair dropped to a fresh daily low of 107.03 in the early trading hours of the American session with the initial reaction to the weekly Jobless Claims data from the US. However, with Wall Street’s main indexes trading in the positive territory and the US Dollar Index advancing beyond the 100 mark, the pair staged a decisive rebound. As of writing, the pair was up 0.35% on the day at 107.53.

DXY climbs above 100

The US Department of Labor reported that there were 6,648,000 applications for unemployment insurance during the week ending March 28th. Although major equity indexes in the US fell sharply and erased as much as 1% after the opening bell to reflect a dismal market mood, the negative impact of this reading on the market sentiment remained short-lived.

Commenting on the data, “note that this is a seasonally adjusted figure; without that adjustment, claims are at 5.82 million,” said Jennifer Lee, a Seinior Economist at BMO Capital Markets. “This is a brutal report and sets the tone for how ugly the employment picture is going to be. Double-digit jobless rates are here.”

Additionally, the greenback continued to gather strength against its rivals with the US Dollar Index (DXY) reclaiming the 100 handle and helped the pair extend its rebound. At the moment, the DXY is up 0.55% on the day at 100.05.

Technical levels to watch for

 

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