Dollar Stays Subdued Despite Paring Early Losses

After staying weak till about the end of the Asian session, the U.S. dollar rebounded in late morning trades on Monday, and moved above the flat line rest of the session amid reports showing a surge in number of new coronavirus cases.

Data on U.S. non-farm payrolls for the month of June, and jobless claims data for the week ending June 29th, as well as economic data from other parts of the world, also impacted dollar’s movements.

Data from the Labor Department showed that non-farm payroll employment skyrocketed by 4.8 million jobs in June after soaring by an upwardly revised 2.7 million jobs in May. Economists had expected employment to surge up by about 3.0 million jobs compared to the spike of 2.5 million jobs originally reported for the previous month.

The Labor Department also said the unemployment rate dropped to 11.1% in June from 13.3% in May. The unemployment rate had been expected to dip to 12.3%.

Data from the Commerce Department showed new orders for U.S. manufactured goods saw a substantial rebound in the month of May, spiking by 8% in the month after plunging by a revised 13.5% in April.

Economists had expected factory orders to surge up by 8.9% compared to the 13% plunge originally reported for the previous month.

In other U.S. economic news, the Commerce Department released a report showing the U.S. trade deficit widened more than expected in the month of May amid a steep drop in the value of exports.

The dollar index, which rallied to 97.34 from an early low of 96.81, was last seen at 97.22, up marginally from previous close.

Against the Euro, the dollar firmed up to $1.224 a sterling, before retreating to $1.1240, recording a loss of about 0.12%. despite a deep recession, the euro area jobless rate rose only marginally in May as the short-time work programs of member countries to support jobs amid the downturn caused by the coronavirus pandemic suppressed actual unemployment.

The unemployment rate climbed to 7.4% in May from 7.3% in April, data released by Eurostat showed. In the same period last year, the jobless rate was 7.6%.
However, the unemployment rate was below the economists’ forecast of 7.7%.

The Pound Sterling was slightly stronger at $1.2466, while the Japanese Yen was little changed at 107.50 a dollar.

Against the Aussie, the dollar was down at $0.6926, easing from Wednesday’s close of $0.6915.

The Swiss franc was up slightly at 0.9453 a dollar, compared with 0.9458 late Wednesday. Switzerland’s consumer prices declined for the fifth straight month in June, data from the Federal Statistical Office showed.

The consumer price index decreased 1.3% year-on-year in June, the same rate of decline as seen in May. Economists had expected a 1.2% fall. On a monthly basis, consumer prices remained unchanged again in June, while economists forecast a 0.1% rise.

The core CPI fell 0.8% annually in June and declined 0.1% from the previous month. The EU measure of harmonized index of consumer prices fell 0.1% monthly in June and declined 1.3% from the previous year.

Against the Loonie, the dollar dropped to C$1.3569, retreating from C$1.3587, as oil prices rose again. Canada’s trade deficit narrowed sharply to C$ 0.68 billion in May 2020 from an upwardly revised C$ 4.27 billion in April.

The material has been provided by InstaForex Company –