USD Tumbled Above One-Month Low Ahead of US Employment Data

USD Tumbled Above One-Month Low Ahead of US Employment Data

On Monday, August 2, the USD tumbled just above a one-month low, ahead of the US employment data, which will be out later this week and could influence the Fed’s policy.

The Dollar Index, which trails the greenback in opposition to its six other rival currencies, plummeted 0.10% at 92.102. It is just above its record low of 91.775 last Friday, which is its weakest since June 28.

Last week, it slipped near to 1.00% following the statement of Fed Chair Jerome Powell at its latest July meeting. He said that the central bank will not yet increase the interest rate. Policymakers are still waiting for much more economic progress, particularly in terms of high employment rates.

Additionally, Fed board member Lael Brainard reiterated the focus of the central bank on further progress in the labor market.

Meanwhile, Minnesota Fed President Neal Kashkari stated that the surge in the coronavirus delta variant could slow the US economy in the second half of 2021.

On Friday, August 6, July’s nonfarm payrolls will be out. Economists are eyeing a 900,000 increase in jobs, which would be the largest jump in 11 months. This forecast aims to beat the 850,000 jobs from last June.

An analyst commented that they are anticipating robust US jobs report this week which is needed to support the pace and composition of the Fed’s bond purchases at the end of this month.

Moreover, the central bank’s decision that was handed down last June boosted the greenback to its highest level since April 2021. It is due to most investors bet that the asset tapering will start as early as this year.

Currency Exchange Rates

Furthermore, the AUD/USD pair dropped 0.01% to 0.7344 since the Reserve Bank of Australia is likely to reverse its previous statement to start tapering assets at its meeting on Tuesday.

On the other hand, the USD/CNY pair climbed 0.05% to 6.4644 while the recently released Caixin Manufacturing Purchasing Managers’ Index of China in July fell to 50.3. Additionally, last month’s manufacturing and non-manufacturing PMIs that were released last Saturday came in at 50.4 and 53.3, respectively.

Consequently, the GBP/USD pair also rose 0.01% to 1.3902 ahead of the Bank of England’s policy meeting on Thursday.

Also, the NZD/USD gained 0.11% to 0.6982 while the USD/JPY subsided 0.12% to 109.57.