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Dollar Rebounds Against Other Currencies at Market Opening This Week

The US Dollar rebounded against other currencies after the latest Non-Farm Payroll Labor sector data. Dollar also rise due to the U.S. President - Trump's decision to draft a policy on the Pandemic aid fund, even though Congress had not reached an agreement. In these plans the U.S. people will receive grants of $400 per week. This is fewer than the previous CARES programs. This decision is likely to have a legal challenge, because the one who could authorize the funds by U.S. Law is the Congress.

Congress has lasted more than 2 weeks, but has not yet reached an agreement on the amount of budget to be issued. The Democratic Party aimed for $3 trillion grant, but the Republican Party only budgeted the amount of $1 trillion.

While the Non-Farm Payroll report is a bit surprising, because the addition of employment in the previous period which was 4,791,000 drops to 1,763,000. But it is still better than the estimated 1,530,000. On the other hand, the average wage rate has also increased by +0.2% better than the estimated -0.5% and the previous period of -1.3%.

The unemployment rate, which has begun to improve, decreased to 10.2% from the previous period of 11.1%. But still better than the estimated at 10.5%. The three labor sector indicators are showing that economic activity is not as bad as it is predicted and economic recovery optimism can still be expected. This week the important data to be examined is CPI inflation data on Wednesdays and Retail Sales data on Friday later.

On the other hand, the Euro underwent a change below the 1.18 level along with the rebound in the U.S. Dollar currency. This happens despite the data released last week which still showing an increase in economic activity. Last week, the Euro had strengthened to the highest level at 1.1916. This is the highest level in the last 2 years or since May 2018. A number of important data will be released this week, which is consumer confidence from ZEW, Industrial Production, CPI inflation data in Germany and France, trade balance, and GDP.

The Pound also underwent a sharp change against U.S. Dollar. This happens because it was getting away from the highest-level last week, which was the highest level in the last 5 months. Last week, the Bank of England (BOE) in the post MPC monetary meeting are showing optimism about the ongoing economic recovery. A number of data will be released. The GDP estimate data from NIESR today as well as BRC Retail Sales Monitor need to be examined. Tomorrow, the labor sector data, the government's official GDP data along with other data will be released.