The US Dollar rebounds on strong job growth and positive economic indicators. The price has recently rebounded in value against other key currencies, reaching a level above the crucial 104.00 zone. This rebound followed a period of volatility in foreign exchange trading due to the Labor Day holiday in the US.
Initially, the US index weakened due to a rise in the unemployment rate to 3.80% last month. However, the subsequent creation of 187K new jobs, exceeding the analyst predictions of 170K, helped reverse this trend. The positive outlook was further supported by the US ISM Manufacturing Purchasing Managers’ Index (PMI). It, however, rose to 47.60 from 46.40, surpassing the median forecast of 46.90.
US Dollar Market Likely to Become Unstable
Manufacturing prices in the US also saw an increase, indicating economic growth. These factors, along with a climb in the 10-year US bond, have contributed to the boost to the US market.
The forex market has been experiencing volatility in recent weeks. This is, however, partly due to the Labor Day holiday in the US and Canada. As a result, trading ranges have remained intact, and consolidation is expected. However, the market is likely to become unstable again as several countries have important economic releases scheduled. This could lead to further currency volatility.
Australia is soon releasing their company’s quarterly gross gains and ANZ August job advertisements, which could impact their currency. Germany will report their July Trade Balance, and Switzerland will provide their GDP growth rate. Additionally, the Eurozone will release its Sentix Investor Confidence report, and ECB President Christine Lagarde is scheduled to speak at an event in London.
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