Ahead of the release of the much awaited NFP figures, the US dollar is trading cautious against its major peers over worries that economic recovery in the US has possibly stalled even as coronavirus infections continue to rise. At the time of writing, the US dollar index DXY is trading around 93.12.

The US dollar, which had previously made significant gains in the initial stages of the pandemic, is losing its sheen over concerns about the ongoing increase in the number of cases and deaths due to coronavirus in the US. In addition, falling Treasury yields and the failure of the Congress to finalize the next round of stimulus measures are also weighing on the greenback.

While economic data over the past couple of months indicated that the US economy was working its way back towards recovery as lockdowns were eased, recent data releases have been more disappointing. This has raised concerns that the pace of recovery has slowed down in the US, even as other economies, especially in Europe, appear to be faring better.

Economists expect today’s NFP report to reveal a slowdown in job creation for the month of July. If the figures come out worse than that of the previous month, it could send the US dollar further lower, reinforcing markets’ fears that the resurgence in infections has rattled economic progress in the US again.