- Virus driven economic-worries push the currency down
- Euro gaining at the expense of the dollar; near 2-year high
- US job numbers crucial
The US dollar continued to struggle against its competitors due to the concerns on the economic front. There are fears that the US economic recovery may lag other countries’; today’s jobs data is considered crucial in this context.
The dollar index is near the two-year low of 92.539, registered on last Friday and is trading near 92.814 after falling 0.5 Percent in the previous session.
Analysts see further downside in the currency this month after it suffered a massive fall in July. Traders sense that the economy might underperform other countries, thanks to the poor response to the COVID-19 pandemic.
The Euro gained 0.5 Percent yesterday against the dollar and is trading near 1.1869 dollars, close to Friday’s two-year high of 1.1908 dollars, continuing the bull run since July 21 on the recovery fund agreement among the European leaders.
The Japanese Yen also is weaker against the Euro; EUR/JPY is trading near 125.25 and has hit its one-plus year highs in recent days.
USD/JPY is trading near 105.52, without much change from the earlier session. The dollar had extended losses yesterday, after private payrolls growth data showed a sharp decline, stoking concerns of a tepid job market recovery. These fears were more pronounced after ISM data showed a decrease in hiring; despite US services industry activity gaining momentum in July with the new orders surging to a record high.
Weekly data to be released today at 1230 GMT is expected to clock 1.415 million claims last week compared to 1.434 million prior.
Payroll growth figures, to be released on Friday, are expected to slow to 1.6 million in July from 4.8 million in June.
The US has on record more than 30 million people on jobless benefits; hence the recovery in employment is critical for economic growth. Investors also expect to see more positive developments on the stimulus-bill talks and are counting on the aid-package-boost to the economy. But, both camps are seen to be hardening their stance, as of now, on their own demands.
As Congress will adjourn on August 10, it is vital to dish out a deal before the end of this week. The dollar can rebound if the White House and congressional democrats reach a middle ground soon.
