Volatility was low for the Greenback this week, and after an early week bounce, the U.S. dollar felt the selling pressure once again as traders priced in uncertainty with the latest U.S. government stimulus package, improving global economic data, and lots of mixed commentary from Federal Reserve officials.
United States Headlines and Economic data
Monday:
ISM Manufacturing PMI for July: 54.2 vs. 52.6 in June
U.S. manufacturing operating conditions improve for the first time since February – IHS Markit
Fed’s Kaplan: data doesn’t support firms’ complaints on jobless benefits
Fed’s Bullard: Recovery looks to have slowed in July, no smooth track ahead
U.S. labor market is weakening, Fed’s Kaplan says
Fed’s Barkin says economy faces ‘sinkhole’ without more fiscal support
After an Asia and London session bump higher for USD on no apparent catalysts, sellers on the Greenback stepped in during the U.S. session, likely on improving global economic sentiment (Eurozone manufacturing economy returns to growth in July, U.K. output growth at 32-month high as reopening of manufacturers and clients gathers pace, Japanese business expectations continue to rebound from April’s low point) prompting traders to moving more into risk assets. Positive sentiment on U.S. businesses and falling bond yields were also a likely driver for the Greenback’s turn lower all the way through Wednesday’s trade.
Tuesday:
U.S. factory orders beat expectations in June
New York Current Business Conditions 15-month high 53.5, Six-Month Outlook 49.6
Wednesday:
U.S., Chinese officials to meet Aug. 15 to assess trade-deal compliance
The U.S. dollar’s fall stabilized and bottomed for the week out on the session, correlating with the highly disappointing ADP private payroll report (167K jobs added vs. 1M expectations) that likely sparked risk-off vibes in the market.
Fed Vice Chair Clarida still sees the economy staging a comeback this year
U.S. trade deficit fell to $50.7 billion from $54.8 billion in June
Fed’s Evans says the power to get the economy going lies with Congress
ISM Services PMI for July: 58.1 vs. 57.1 in June
Stimulus Talks Accelerate With Lawmakers Under Pressure to Act
Fed’s Mester says labor market is even weaker than data suggests
Thursday:
U.S. weekly jobless claims ease, layoffs jump 54% in July
McConnell believes Dems, GOP will reach virus relief deal ‘in the near future’
Friday:
We saw a broad U.S. dollar rally ahead of the highly anticipated U.S. Non-farm payroll report, likely due to broad negative risk sentiment driven by rising geopolitical tensions between the U.S. and China, and/or the eventual failure of the U.S. government to come up with a stimulus package before the end of the week.
Non-farm payrolls increased by 1.763 million jobs last month after a record 4.791 million in June
U.S. Consumer borrowing increases in June after declining at start of pandemic
Coronavirus stimulus talks fall apart in ‘disappointing’ meeting between Democrats, White House