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Currency Market Analysis

May 21, 2021 | Currency Market Analysis

Global Themes

Equites rebound as US Jobless Claims fall to post-pandemic low

US equites rebounded overnight to post their first positive session this week, with the S&P 500 and Nasdaq composite ending the day 1.06% and 1.77% higher respectively.

Sentiment was also buoyed by better-than-expected economic data, with the weekly jobless claims coming in at 444,000 - the lowest since March 14, 2020.

Economists surveyed by Dow Jones had been expecting 452,000 new claims.

Greenback slides as US bond yields retreat

Treasury yields have slipped from yesterday’s levels as investors further digested the Minutes from last month’s Federal Reserve policy meeting.

Whilst the initial reaction was higher yields after several board members voiced their preferences to reduce asset purchases later this year, the market has realized that little has changed in terms of the Fed’s policy stance.

The US 10-year bond yield has traded back to 1.63% currently, five basis points lower than yesterday morning.

This has weighed heavily on the greenback, with the broader US dollar index now trading at 3-month lows.

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