Let us check the news on the market. In the United States, there are growing signs that the labor market recovery from the depths of the pandemic is faltering. Moreover, financial support from the government was virtually depleted.
Last week, the United States central bank overhauled its policy framework to focus less on inflation and focus more on addressing shortfalls in employment. Inflation would allow the bank to keep rates lower for more extended periods. Thus, it is harmful to the dollar.
On Thursday, Chicago Federal Reserve President Charles Evans said that the bank could promise-keeping interest rates pinned near zero until inflation reaches 2.5%. It is modestly above the inflation target of 2% and well above current low levels.
On Friday, in Asia, the dollar index saw little change against a basket of six major currencies at 91.810.
Because of the outlook for the Federal Reserve’s monetary policy, the dollar’s downtrend will continue for at least another three months. That is what a Reuters poll of analysts showed on Friday.
On Thursday, there was a rout in United States tech shares. Its increased risk aversion. Thus, after that, Asian stocks fell, and the Australian dollar eased slightly to $0.7264.
Due later Friday, Australian retail sales will most probably show a pickup in July. Thus, may ease some concerns about the economy. Nevertheless, a recent pickup in coronavirus cases clouds the outlook.
The New Zealand dollar fell to $0.6697 across the Tasman Sea.
On the United States dollar, analysts are bearish. Australian and New Zealand dollars fall on weak stock markets. Traders wait for non-farm payrolls.
Traders are waiting for crucial United States jobs data that may cast doubt on the strength of economic recovery from the coronavirus outbreak. So, the United States dollar steadied against major currencies.
In global markets, there was a sell-off.
That is the current situation in the United States.