Corporate Advice

August began with the U-S dollar holding steady against its counterparts, as traders awaited progress in negotiations for additional economic stimulus.

Also, a better-than-expected expansion in the Institute for Supply Management’s US manufacturing index proved positive for the dollar.

However, it came with a warning as output remained far below pre-virus levels and the employment index was below forecasts, at contractionary 44.3.

Despite a slowdown in new COVID cases and encouraging factory data, investors remained concerned about the US economy.

Also the central banks’ liquidity measures and calmer markets generally, have eased demand for the world’s reserve currency.

US data also reported a sharp decrease in payrolls growth in July, with 167,000 jobs created during the month compared to the 4.314 million jobs in June suggesting increasing unemployment.

With more than 30 million Americans already claiming unemployment benefits, the latest rise in unemployment indicated a slowdown in US economic recovery.

Furthermore, the US dollar was in demand after hitting a two-year low. Gains were capped by falling US.

Treasury yields, ever-increasing numbers of COVID-19 cases, and the stalemate in the US Congress over the latest stimulus package.

The claims report came in mixed which showed fewer Americans sought jobless benefits, and 31.3 million Americans were still receiving unemployment checks in mid-July.

The US dollar later held overnight gains after seven weeks of an almost relentless fall, as investors clung to hopes of an agreed stimulus deal in Washington, while US bond yields rebounded from multi-month lows.

The dollar also found support, as a jump in US yields pushed it higher against the Japanese yen and investors wagered on a broader and deeper US coronavirus recovery.

Elsewhere in financial markets, focus was on the political holdup in Washington over a new stimulus package, which covered broader investor sentiment.

COVID-19 continued to impact US economic recovery, with almost 5.2 million cases in the US alone as of today, and millions unemployed.

Although investors have swung between optimism and pessimism over the stalled package, some argued that US economic recovery depended on both sides reaching an agreement.

Meanwhile, the US dollar was helped by strong US jobs data as well as firmer global demand for safe-havens amid concerns about the coronavirus recovery, setting the currency up to potentially snap a seven-week losing streak.