The index of dollar is predicted to have the contInued weakened. It is especially in the global economy recovery moment like this. A data from Bloomberg on Sunday showed that the index which measures the USD power to other currencies has been corrected.
That was appreciated for about 0.57 percent last week. So, that became 91.000. However, if it is measured from the beginning of the year, that American Dollar is rising for 1.17 percent. Meanwhile, euro is stronger for 73 percent from the USD.
Euro is now in US $1,20 per Euro. Yen is also having the same trend. That currency is 0.12 Percent higher and pound sterling grows 0.42 percent to the American dollar. There are many other things happened on currencies and commodities so far.
The Release of Employment Data
The dollar weakened is caused by a release made by the United States Employment Department. They confirmed the level of non – farm employment on January. The result is 49.000 or lower than the consensus of 85.000.
However, that realization is better than the decline of 227.000 which is happened on December 2020. Furthermore, the unemployment level also increases for 6.3 percent although it is better than the last period. However, it is still under the expectation.
Many experts expected that the level is around 6,7 %. The data reality creates a pessimism that the economic growth in the United States will be not that massive. It means that the stimulus package value could be continuous to increase.
That stimulus will be expensed by Joe Biden as the president of the United States. The aim is to recover the economic condition in the country where many people believe that it will be increasing as time goes by. Market participants just can wait.
Dollar Is Having More Liquidity
The giant fiscal stimulus in America can cause dollar has too much liquidity. As time goes by, that may eroding the dollar value. Biden has been submitted the stimulus package. The value is US $1.9 trillion. However, the distribution is still stuck.
That was done by the Republic party because they still wait for the effectively of US $900 billion stimulus. It is especially about its impact on the economy which is launched on December 2020. Without that package, the situation will be difficult.
Elsewhere, the private sector in the United States is not yet recovered because of the employment cut in the retail, transportation, and warehousing industry. That is also happened on the entertainment service. Meanwhile, other sectors grow moderately.
The latest data from the US Employment Department also shows the positive thing. The example is the people there who work longer than the usual. Furthermore, there is also an increase on the service sector for a while.
The Sign of A Good Thing
An economist said that the newest data in America shows that the employment market is still not losing its uncertainty. However, the good signs seem will be coming soon. When USD was weakened at that time, the US yield treasury was increased.
Usually, the yield treasury strength will sustain Dollar because both of them are moving in line along the last session. An expert predicted that the yield treasury may decline up to 1,50 percent which indicated the economy recovery in the United States.
The deepest decline of The USD since the beginning of this year makes the market participants have not changing their bearish view yet. It is especially to the greenback in the future. It is too early to say and predict the further trend in the future.
A chief manager of a well-known company stated that Dollar has been entering the saturated buy territory. However, the optimism of increase in the future is still quite strong. Since the beginning of the year, this main currency has increased for 2%.
