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U.S. Dollar Struggles to Gain Upside Momentum Despite Positive Unemployment Data

10 August 2020

The rally of the U.S. Dollar continues in a bear market, as we have seen a positive data on  jobs report last week. The average wages rose by 0.2% in July compared to -1.2% in June and are aiming to recover back to 0.4% as per last  September.

According to the U.S. Bureau of Labor Statistics Non - farm payrolls report showed that the U.S. economy has added over 1.76 million jobs beating expectations of 1.6 million resulting in short term recovery move of the U.S. Dollar.

The U.S. unemployment rate was at 10.2%, which is still above the 10% mark although it is lower than the previous month as it hit 13.3%. However, it is still far from the first quarter’s readings, when the unemployment rate in February recorded a 3.6% level.

The president of the United States Donald Trump has banned  two major Chinese social media companies TikTok & WeChat, and is threating to delist Chinese companies from U.S. stock exchanges unless they follow and comply with an audit standards by January 2020. A hit back is expected from China.

Although we are positive on the outlook for the U.S. Dollar that is finding a recovery despite the ongoing debate of another relief package in the U.S. Senate and Trump’s moves as he signed an executive action of a temporary payroll tax deferral for some workers and continuous unemployment benefits, the printing press and close to zero interest rates pressure the Dollar. So, we expect a downward momentum for the Greenback to return

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Everything posted herein is the Personal Opinion of the Author(s) and does not represent a statement made by TeleTrade. TeleTrade is providing this for informational purposes.

Hussain Shabbir

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