By Yasin Ebrahim
Invesitng.com – The dollar hovered around 22-month lows on Thursday on further signs the economic recovery in the U.S. could be grinding to a halt in the wake of a resurgence in coronavirus cases nationwide.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.22%, to 94.72.
The U.S. is on track for a strong rebound in the third quarter, but signs of rising initial jobless claims and declining footfall at retail stores suggest the recovery has come unstuck.
The U.S. Labor Department reported Thursday that 1.4 million people filed for unemployment insurance for the week ended July 18, up 109,000 from the prior week and above economists’ estimates of 1.3 million.
While weaker footfall “isn’t a huge concern” as June data showed retail sales returning to their pre-Covid levels, other indicators including industrial production and employment highlight that overall economic activity “remains significantly below pre-pandemic levels,” said Paul Ashworth, chief U.S. economist at Capital Economics.
The potential backdrop of a slower-than-expected recovery has dampened investor hopes for a V-shaped economic rebound.
The July Bank of America (NYSE:) Global Fund Manager Survey showed that 30% of the surveyed fund managers expect a W-shaped (double-dip recession) recovery, up from 21% last month.
Just 14% of the fund managers expect a V-shaped recovery, down from 18% in June, the survey showed.
The dollar has also been dragged lower by a sharp rise in the euro, which looks set to notch its fifth-straight weekly win against the greenback.
rose 0.28%, to $1.116.
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