Let us track the changes in the market. After upbeat manufacturing data, the United States dollar index rose. The Australian dollar fell after the recession confirmed. Euro fell back below $1.19.
There was a positive United States manufacturing data. Thus, the United States dollar extended overnight gains. On Wednesday, Gross Domestic Product (GDP) confirmed Australia is in recession for the first time in three decades. Thus, the Australian dollar took a hit.
With new orders surging, the United States manufacturing data increased more than expected in August.
Factory employment was already in decline before the coronavirus. It is because of the administration of Trump started a new trade war with China. Thus, factory employment continued to lag. It is in line with economists’ view that the recovery of the labor market is running out of steam.
Dollar and Others
The United States dollar has been on a losing trend. Steadying overnight, then extending gains in early London trading, the dollar rose against a basket of major currencies. At 0712 GMT, it was up 0.3% at 92.511.
Also, the news pushed up Asian shares overnight. Moreover, European indexes opened higher.
Thu Lan Nguyen works at Commerzbank. She is an analyst. Nguyen said that the long-term economic fallout from coronavirus is unknown. Nevertheless, it is the relative economic performance of countries that drives exchange rates, besides with developments of monetary policy.
Moreover, she added that the United States dollar could benefit from significantly improved ISM data yesterday. The data suggested a continued high-speed recovery. Thus, there is a high likelihood that the United States may be able to overcome the crisis comparatively better after all.
She said that factory orders and ADP data today will most probably provide additional momentum for the United States currency short-term. It will be in case these sets of data turn out to be similarly positive.
That is the current news of the market.