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
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,
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.