The US dollar experienced a very poor trading month in June due to unexpected dovishness of US policy makers and terrible GDP report. Can the greenback change the bearish trend in the first trading week of the new month?
Unlike the last week, this weekâs fundamentals are expected to be mostly supportive for the US currency. The major event will be release of non-farm payrolls, which will be issued earlier than usual (on Thursday instead of Friday), due to the Independence Day in the United States. Forecasters predict that the payrolls will show solid growth by 211,000, while the unemployment rate will remain unchanged at 6.3 percent. Prior to the NFP data, on Wednesday, Automatic Data Processing will release its employment report, which is also expected to be positive, showing a 206,000 increase in June versus 179,000 in May.
Does this mean that the US dollar should rally? Not necessarily. The problem is that the greenback, being considered a safe currency, usually requires volatility to show a good performance. Yet the US holiday should drain liquidity from the Forex market and will likely prevent the dollar from rallying. But at least the currency may halt its decline in case the optimistic forecasts prove true.
Forex Crunch has a mixed view on the dollarâs performance, expecting gains versus the euro and the Japanese yen, but losses against the Great Britain pound and commodity currencies, especially the New Zealand dollar. Daily FX is neutral on the US currency.
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