According to Friday's data published by Bureau of Labor Statistics, 1.76 million jobs were created in the United States in July, with 4.8 million in June. The renewed wave of COVID-19 infection in the USA seems to translate into the US labour market and slow down the recovery of the economy.
However, the publication was better than market expectations of 1.6 million. The largest number of jobs were recreated in the recreation and hospitality sector, nearly 30% of the total. Despite seemingly positive data, employment in the USA is lower than before the pandemic by about 13 million jobs. Meanwhile, the unemployment rate fell to 10.2 percent from 11.1 percent in June. The total number of unemployed people in the United States was 16.3 million. The picture of these data may show how far we are from the normality that financial markets seem to discount in the form of optimism on the American stock exchange. According to these data and the increase in the incidence of disease in the USA, reality may still be far from normal for a long time.
The US dollar seems to be strengthening after the above-mentioned publications. Despite their general negative overtones, they are better than market expectations. The EUR/USD exchange rate seems to be back below 1.1800, with a slight correction for a series of seven weeks of appreciation. In the wider and longer-term, such a poor situation in the US labour market may force the Fed to take further action to loosen monetary policy, so the strengthening of the USD may not be sustainable.
In the context of the US dollar, the US investment bank Morgan Stanley send today a note to its clients. According to MS, the US dollar is currently in the most oversold area in over 40 years. Hence, the bank is changing its attitude from bearish to neutral. As a result, the bank's traders closed short positions on the dollar index and long positions on the euro and Australian dollar, Reuters said.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
