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The US Dollar (USD) is anticipating positive economic data to support its upward trend against major currencies.
Recent manufacturing data helped the greenback, after data showed an increase in new factory orders as well as a surge in the sector purchasing managers’ index (PMI).
However, the effects of the rising number of COVID-19 cases across the United States may cast its shadows on the economic recovery signs.
Non-farm payrolls are expected to increase by 1.4 million in August, compared with 1.763 million in July, in what would be it lowest increase since May.
Average working hours for last month are expected to stabilize at 34.5, maintaining its reading in July, according to market expectations, while average hourly earnings are expected to register a 4.5% growth in August, after rising by 4.8% in July.
Similarly, labor force participation rate is expected to maintain its level at 61.4%.
As for the unemployment rate, a decline to 9.8% from 10.2% in the prior month is expected according to the market’s consensus.
Some early indicators suggest that the recovery is not accelerating due to the continuity coronavirus outbreak.
This means that data, other than the unemployment rate, might not provide the much needed support for the USD tomorrow.
Although initial claims for unemployment benefits in the US during the week ending August 29 declined by 130,000, its level at 881,000, which came better than market expectations at 950,000, remain alarming after around six months into the pandemic.
It remains to be seen how the new data will reflect on the USD, despite early indicators showing some positive signs, and others continuing to reflect the challenges imposed by the COVID-19 crisis.
