The dollar continues to strengthen against the euro after Federal Reserve Chair, Jerome Powell’s speech yesterday in which he reiterated that they still have a long way to go to reach the Fed’s goals of 2% inflation and full employment.
Markets seemed disappointed over Powell’s dovishness and lack of concern about bonds. He remained relaxed, indicating that the current monetary policy stance was appropriate and that the Fed will not raise interest rates as employment levels rise. As a result, yields have risen further and are nearing one-year highs yet again.
US initial jobless claims have edged up again after falling to their lowest figure in three months last week. Initial claims have now been over 700,000 for 12 months straight, something that has never been seen before in the US.
In more positive news, factory orders rose 2.6% between December and January, indicating hope for economic recovery in 2021. Non-farm payrolls will be released later today; it is expected that 182,000 jobs will have been added to the US economy in February.
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