The US dollar erased intra-day gains made in European and Asian trading sessions early Monday morning, June 7. It also fell across the board at New York trading open following US non-farm payrolls missed predictions.
We are eager to report this foreign exchange news about the US dollar. We understand that the United States is gradually recuperating from the COVID-19 crisis.
With this development, we want our readers to understand how the US official currency performs as it can impact them and their trading lives significantly. The United States Department of Labor’s closely watched employment report last Friday, June 4, said that non-farm payrolls surged by 559,000 jobs in May.
Data for April got revised slightly to demonstrate payrolls increasing by 278,000 jobs instead of 266,000 as previously reported. International media firm Reuters surveyed economists who had predicted 650,000 jobs made last month.
The unemployment rate in America dropped from 6.1 percent in April to 5.8 percent a month later. Furthermore, people have reportedly understated the jobless rate by miscategorizing themselves as employed but not at work.
According to the news posted online by real-time forex analysis and news outlet FXStreet, the greenback’s broad-based weakness is due to several other contributing factors besides the latest US jobs report. Among them are the rise in US stocks and the fall in US Treasury yields.
Additionally, the US dollar index dropped from a three-week high against its rivals. This event made gold less expensive for holders of other kinds of currencies.
The US dollar gained a fresh, almost-two-month high of 110.33 Japanese yen briefly in Australia. In the Asian trading morning, the price encountered renewed selling and nosedived to 110.15 Japanese yen.
At New York open, intra-day decline expedited following the soft US jobs report’s release and sell-off in US Treasury yields. A tumble to session lows amounting to 109.37 Japanese yen took place as well before staging a minor recovery.
The price last traded at 109.49 Japanese yen near the close. We believe that the weakening of the US dollar is a temporary event amid the still ongoing coronavirus or COVID-19 healthcare emergency.
We believe that the United States is on its way to recovery from the COVID-19 pandemic. As of Sunday, June 6, the Centers for Disease Control revealed that more than 300 million COVID-19 vaccine doses had already been administered in the United States.
This report means that more than 63 percent of American adults had already received at least one dose of the vaccine shot. Plus, we gathered from a Bloomberg News report that US Treasury Secretary Janet Yellen had announced the advantages of President Joseph Biden’s US$4-trillion spending plan.
This measure would be favorable for the United States, per Yellen, though it could contribute to higher interest rates and rising inflation. We are pleased to learn the US employers increased their recruitment of workers last month.
We also learned that these companies increased wages as they competed for laborers. We believe that, as the United States gradually recovers, the US dollar’s value will also follow suit, though swings are inevitable during the pandemic and post-pandemic times.