By Gina Lee
Investing.com – The dollar retreated on Friday morning in Asia, with investors defying gloomy economic data to buy riskier currencies after some countries loosened lockdown measures.
Thursday’s report revealed that 3.169 million Americans claimed unemployment last week, with over 31 million Americans losing their jobs since late March and an unemployment rate of 16%.
The dollar was also dealt a blow after U.S short-term bond yields hit a record low. Investors then started to price in the first-ever negative U.S. interest rates.
Despite the U.S. Federal Reserve saying that it does not view negative rates as “appropriate”, a worsening economic downturn could force the Fed’s arm to expand its crisis response.
Some investors also sold greenbacks ahead of Thursday's data.
“Everyone knows it is going to be terrible and people are focusing on the pace of a rebound from there,” Ayako Sera, market strategist at Sumitomo Mitsui (NYSE:SMFG) Trust Bank, told CNBC.
“But because this is an unprecedented pattern, you cannot find any historical example, and where there is no example, even artificial intelligence cannot find an answer.”
The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.19% to 99.713 by 11:28 PM ET (4:28 AM GMT).
Meanwhile, the USD/JPY pair gained 0.11% to 106.38.
The AUD/USD pair gained 0.64% to 0.6536 and the NZD/USD pair gained 0.61% to 0.6120.
The USD/CNY pair dropped 0.12% to 7.0743 even after negotiators from the two countries agreed to support the first phase of their trade deal.
The GBP/USD pair gained 0.28% to 1.2395 after the Bank of England warned on Thursday that the lockdown in place in the U.K. would lead to the country’s biggest economic slump in over 300 years. BOE also kept the door open for more stimulus in June as it contemplates easing the lockdown next week.