US Dollar Weak Ahead of NFP Release

US Dollar Weak Ahead of NFP Release

Posted Friday, October 2, 2020 by
Arslan Butt • 1 min read

On Friday, the US dollar looks all set to experience the weakest weekly performance in over a month, weighed down by encouraging reports of an upcoming fiscal stimulus package getting approved by lawmakers soon. At the time of writing, the US dollar index DXY is trading around 93.92.

The dollar has weakened by 0.9% against its major rivals so far this week and is holding close to a one-month low in early trading. For now, moves in the US dollar are limited as traders await the NFP report due for release later today, with expectations for a weaker jobs report since last month.

On Thursday, discussions between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to make progress due to some differences even as time is running out to roll out the coronavirus relief package before the November elections. For now, the delay in the announcement of financial aid is supporting the dollar, which will weaken once fresh stimulus measures are finalized.

The overall mood in financial markets is also one of caution due to a rise in coronavirus cases, which can hold economic recovery back across the world. Madrid is getting ready to reimpose a lockdown amid a resurgence in infections even as other European cities have implemented fresh restrictions to curb the spread of the virus once again.

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