The fall of the dollar in the Forex market was an unexpected event at the start of the month of July. Even the analysts began to consider that there was no way back for the dollar. However, the expectations grow with this new possibility of rebirth.
Despite the good performance of the currency at the beginning of the pandemic, the effects of the dollar showed that the political situation and social of a country can directly affect the behavior of a currency on Forex.
Therefore, while the tensions between China and the united States increased, and the Coronavirus was without any control, spreading through the territory, the operations in the dollar were to decline.
The free fall of the dollar
The leading international currency par excellence of the investors and traders has fallen out of favor lately. This is due to a combination of concerns around the united States.
Expectations of further action by the Federal Reserve, the evaporation of the demand for shelter in the midst of markets are more quiet and a resurgence of the euro joined together to sink the reserve currency.
These factors have caused the dollar to keep in a free fall. So much so, that the currency has maintained the way to its biggest fall monthly in a decade.
However, some traders, experts and analysts are attentive to the future publication of the unemployment figures in the united States. They consider this indicator as a possible promise of rising to the trend of the dollar.
At the time of publication, the dollar is trading at 1.1785, after having played the last Friday its annual minimum of 1.19 against the euro.
Chart of EURUSD of the last 5 days
The forecast of the unemployment figures and the payroll for american agricultural
For traders and analysts comes a big week ahead in the Forex market, and even more for the dollar. Since, this publication of figures for the day Friday, it can mean fuel to the rise of the dollar.
Analysts wonder if a payroll report positive be enough to stop the relentless fall of the dollar.
This then that the Reserve Bank of Australia and the Bank of England will announce their decisions on rates of employment. Highlighting that make their predictions before the data of the most important employment of the united States to be published.
The other variable that will affect the majority of transactions in Forex, is whether the U.s. Congress will reach a consensus on the new bailout package.
Last month, the unemployment rate for the U.S. had a strong low to the 11.1%, now is expected to further decrease to 10.5%. Of all ways there are to wait until the official figure on Friday, as there are reports of continued layoffs.
The free fall of the dollar has not stopped in the Forex market, so traders expect better news with the unemployment figures of the united States.
However, it is too soon for u.s. payrolls to reflect the slow recovery to cause of these figures. Even more so when we are just watching the late effects of the virus on the economic figures worldwide.
The question for gold: what The dollar may be able to recover?
Although the expectations are set for these figures to publish. Actually there is still uncertainty among traders and analysts about the currency in the Forex market.
The benefits decisive, as the extra $600 per week in aid of unemployment, are due by July 31. And lawmakers have made little progress on a new aid package.
This generates a risk of a major negative shock in income for millions of americans. Possibly affecting the individual consumption, and still more the figures of the u.s. economy.
And, although it is true that probably will close some kind of agreement before Congress enters in recess at the end of the week, there is a lot at stake.
Since politicians do not wish to be blamed for destroying the recovery, especially before the elections.
In this way, the more time goes by without clear signs that an agreement is within reach, the more nervous will be the markets, not allowing the rise of the dollar.