At the start of the week, the USD stayed relatively resilient. US data in recent sessions including price indexes have fallen short of predictions which has limited the currency. But it wasn’t all bad news for the USD, as it continued to benefit from the global uncertainty caused in no small part by the coronavirus outbreak. Many investors have found safety in the currency and has seen the currency rise.
Meanwhile, the US dollar also built strength earlier this week after the ISM manufacturing index surprised the market by jumping up to 50.9 from 47.8 in December - the highest figure since July.
Last week and the start of this week saw the USD trading as the leader of the currency market. The USD gained heavily off the back of the threat that the coronavirus posed to global trade, especially the Chinese economy. Therefore, currencies linked to the Chinese economy fell as the market experienced a risk-off mood. This helped the USD rise as investors took shelter in the currency as a safe-haven. Considering the other viable safe-haven currencies were the Japanese yen and Swiss franc which are both heavily linked to Chinese trade, the USD saw a significant boost that looks like it could well be here to stay for the duration of Corona Virus-related turmoil.
Looking forward to later today, the US will see the release of more labour market figures, which will likely hold more weight against the USD exchange rates. The releases will include the nonfarm payrolls, average hourly earnings and unemployment rates for January amongst others. Investors will be keen to observe the results as the USD could sharply rise if results are in favour of the US economy.
This will play a pivotal role for the USD heading into next week, so investors will be keeping a very close eye on the result of the release at 1:30pm today.
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