The US dollar rose after a series of US economic data released on Thursday (03/June) tonight. That was showing an improvement. This further reinforces the signal that the United States' economic recovery is stabilizing.
It is especially after the COVID pandemic. U.S. private sector payrolls released by ADP National Employment added 978,000 jobs in May. The figure was much better than expectations of a decline to 650,000 jobs from the previous 654,000.
That was the highest since June 2020. In addition, the number of people filing unemployment claims in the America was only 385,000 last week. But the expectation will only be reduced by 5,000 from 405,000 in the previous week.
The trend of the America jobless Claims has continued to decline since the end of April. The same thing also happened on the PMI data from the ISM version. The non-manufacturing sector also added to the length of solid economic data.
The USD Rose from Its Low Level
The data set jumped the US Dollar Index by 0.69% to 90.5. That was the end of a consolidation that has been in place since May 18. The Dollar Index has tracked strong Support levels in the range of 89.94 in recent sessions
The condition happened after a slump of 2% in April, and 1.6% in May. According to Juan Perez of Tempus Inc Washington, the weakening of the US Dollar has apparently benefited the company.
The American economy is getting away from the crisis due to the pandemic. Economic indicators have also provided clear signs of momentum. That becomes a good sign for the further situation.
At the end, their overall situation has been better in terms of business and even politics, with a focus on the large (government) budget in the future. It is done to keep the workforce stable, if not growing, for the rest of the year.
Jerome Powell Speech will be Highlighted
In the future, the market will focus on The Fed Chairman Jerome Powell's speech tomorrow morning and the release of the United States Non Farm Payroll data in the evening.
Consensus estimates the US NFP will add 650,000 jobs in May, after 266,000 jobs in March. Elsewhere, The euro has inhabited the range of 1.2200 against the US dollar over recent times, strengthening its position in its high range this year.
The euro rally raised expectations for further bullish trends in the near future as the USD continued to weaken. However, some forex strategists from Credit Suisse judged that the EUR/USD would not exceed 1.2350 in the next few weeks.
Many see that the ECB's june 23 policy meeting as a defining moment for the euro. If the ECB signals readiness to tighten its monetary policy by trimming Quantitative Easing, the euro could potentially strengthen.
The Notes from the Economy Experts
The economic experts from the Credit Suisse have released their notes which stated that they are predicting that EXB will announce the decline. It is especially for its Quantitative Easing Program.
That is from EUR 80 million to become EUR 60 million per month. That policy change will reflect the EuroZone Macro condition which is better and avoid the extended QE program nowadays.
However, the Forex Strategy Team from the Credit Suisse has the different opinion. They think that the ECB hawkish attitude like that can make the EUR/USD increases until more than its highest target.
The Fantastic Euro Appreciation
Furthermore, the fantastic Euro appreciation like that can avoid the ECB plan to increase the inflation and recover the economy. That is why; ECB may avoid that kind of situation.
The stronger Euro value can loose the inflation pressure, especially in the EuroZone. It js because the import cost and salary from the exporters in this area will be decreasing.
The fact is that the ECB policy has the target for the inflation. It must be raising up to 2 percent or higher. That is the reason why the ECB representatives always criticize the EURO increase in the forex market.
