The performance of the American currency left much to be desired in the past weeks, given that it did not seem to have any prompt improvement. However, thanks to the country’s employment data, the dollar manages to advance strongly in the Forex market in this last session on Friday.
Highlighting that one of the countries that, surprisingly, has been most affected by the Coronavirus, is the United States. This is due to mismanagement and management on the part of the Donald Trump administration, as the relevant measures were not taken at the right time. Bringing adverse effects to the US economy.
However, it seems that the good jobs data released just today Friday, have provided a respite to the dollar and the US economy.
Employment data in the United States
The US employment figures were better than expected. Nonfarm payrolls increased by 1.763 million jobs last month, after a record increase of 4.791 million in June.
These figures excluded government employees as they were artificially driven by a seasonal quirk related to state and local government education.
Economists polled by Reuters had predicted that 1.6 million jobs would be added in July.
While the number exceeded expectations, the economy has regained just 9.3 million of the 22 million jobs lost between February and April due to the pandemic.
This generated a renewed positive performance in dollar trading in the Forex market. However, things do not seem to be improving in the United States.
The dollar advances, but the situation in the United States is tense
Job growth in the United States slowed down considerably in July, and improved notably in the first week of August, thus the dollar gained strength this Friday. But can he keep up with this pace?
Although analysts highlight the clear improvement of the currency on Friday, the atmosphere of tension and complications in the United States does not seem to provide a stable base for the dollar to maintain this performance.
An urgent need for additional help from the government is underscored as a resurgence in COVID-19 infections threatens to dampen the nascent economic recovery.
In addition, the tensions between China and the United States seem increasingly rigid and far from an immediate solution. Causing more disadvantages to the American currency, than advantages for its improvement.
Finally, not all analysts see this improvement in employment figures as something positive.
“The job recovery is on very shaky ground. And without seat belts for the unemployed provided by additional fiscal stimulus, the economy could be on a very bumpy ride.“, said Chris rupkey, chief economist at MUFG in New York.
Dollar price to date
At the time of writing, the dollar index was trading at $ 93,412, demonstrating its clear improvement in performance. EUR / USD is down 0.3% to 1.1842. This despite the fact that German and French industrial production far exceeded expectations in June.
The dollar gains positions at the beginning of the trading day this Friday in Europe. Thus resuming its role as a safe haven against the new tensions between the United States and China.
However, it is very likely that gains will be limited by the stagnation of the US Congress. Well, with the latest stimulus package before the publication of the official monthly employment report.
Although this is good news, the dollar appears to be on shaky ground at the moment. Will you be able to maintain your performance in the Forex Market?