The US Dollar currency rate continues to rebound with strong US non-farm payroll data. It is a long weekend for the US, as the country celebrates Labour Day.
Most currencies recover with the US Dollar showing short-term strength.
The ECB has its monetary policy meeting on Thursday, where ECB President Lagarde will speak. Bank of Canada will also release its monetary policy decisions this week.
The US unemployment claims and PPI month on month is expected this week.
US Dollar Currency Rate at Weeks High
The US Dollar Index is on the upmove for the fourth consecutive day. The US Dollar currency rate closed at 92.97 on Friday, 4 September.
The Dollar Index has to break past 93.19 to see a further uptrend. The safe-haven currency has strong support at 91.72, which is its two-year lows, from where it has bounced.
If the Dollar Index moves past 93.30, it would move further to 93.60. However, if it moves lower than 92.10 levels, the US Dollar Index may see a downtrend.
The November elections continue to cause political uncertainty in the US.
The Dollar Index (DXY) dropped to 92.14 in the last week of August and has now climbed to 93.00 levels. It is at a fresh weekly high with strong US economic data. Almost 1.4 million jobs were created last month. The jobless rate has dropped more than 8.4%.
With Labor Day and a long weekend, health experts fear that there may be a surge in COVID-19 cases across the country. The country has reported more than 6.2 million cases. Pandemic related deaths have increased to 187,000 since the pandemic began.
The unemployment rate has increased to 8.4%, much better than the anticipated 10.2%. The Non-Farm Payroll report has been mixed. The US Labor Department data shows nonfarm payrolls have increased to 156,000 in August, though it is much lower than the forecast of 180,000.
The country has recovered 1.37 million jobs in August, slightly lower than the anticipated 1.4 million.
The Unemployment Rate has declined to 10.2% from 10.9%. The Canadian dollar has decreased with the WTI oil testing $40 level. The USD/CAD continues to move downwards, closing at 1.3060 on Friday, 4 September.
EUR/USD Currency Rate Rebounds to 1.20 Levels before Correcting
The EUR/USD exchange rate closed at 1.1838 on Friday, 4 September. With the greenback growing stronger, the Euro is unable to make much progress. The monetary policy decision and the ECB rate are expected this week. Though the pair dipped slightly lower than 1.18, it popped back to close at 1.838 on Friday. Much will depend on the monetary policy to be announced on Thursday.
The Euro to US Dollar exchange rate continues to remain at two-year highs. In March, it reached a low of 1.0636 and a high of 1.1494.
The EUR/USD currency rate touched a multi-month high at 1.20 levels on Tuesday. The US dollar has gained strength with positive US data. The European Union is hit by a second wave of corona infections and this continues to worry political leaders.
GBP/USD Recovers from Oversold Territory
The GBP/USD closed at 1.3276 on Friday, 4 September. The pair continues to face resistance at 1.35 levels. If the pair breaks above the 1.40 levels, it may see a long-term upmove. However, for the short-term, it needs to consolidate at this level but should not breach 1.30 levels if it should continue upwards.
The British Pound recovers against US Dollar and Euro. The Sterling is at the year’s high at 1.3483 last week against the US Dollar. The British Pound exchange rate to the Japanese Yen has closed at a multi-month high at 141.05 in the first week of September.
UK GDP to be released on Friday is expected to go down to 6.6%, while it was previously at 8.7% the previous month. Manufacturing Production is also expected to decrease to 5.0%, while it was at 11.0% the previous month.
Japanese Yen Remains Range Bound against the US Dollar Currency Rate
The USD/JPY closed at 106.25 on Friday, 4 September. The pair took support at 105.30 last week and has been positive for the week.
Japanese Prime Minister Shinzo Abe has announced his intention to resign, stating health-related issues. Uncertainty remains about his successor and the policies that the successor may follow. Political uncertainty will continue to put pressure on the Yen.
The USD/JPY exchange rate continues to trade between the range 106.00 and 106.60. The currency pair has gained support at 105.10 levels in August. Investors do not expect the currency pair to slip past this support unless the Japanese Yen weakens.
Japanese GDP Price Index year-on-year is expected to remain unchanged at 1.5%. Japanese Bank Lending is at 6.3% in July 2020. It is expected to increase to 6.4%.
Australian Dollar Needs Momentum to Move Up
The Australian Dollar to US Dollar currency rate pulls back after an uptrend. The currency pair is making higher highs. The par closed at 0.7282 on Friday, 4 September. It was unable to break the 0.75 level last week, but in the long-term, it is expected to move higher.