The United States (US) NFP employment report published by the US Bureau of Labor Statistics last Friday drove the movement of the US dollar at the close of last week until the opening of early trading yesterday.
If we examine the effect of price movements after the report was published, the US dollar showed a strengthening at the beginning but again weakened significantly after the market digested the reading of the data as a whole.
A job gain of 206,000 in June was better than the forecast of 191,000, but the updated figure for the previous month's increase fell by a significant margin, sparking concern.
In fact, the average hourly earnings as well as the unemployment rate recorded declining numbers.
This situation has increased the tendency for policy in the US to shift to an easing phase and put pressure on the Federal Reserve (Fed).
The decline of the US dollar continued at the opening of trading yesterday, but was seen to be stable in the New York session.
After the market's attention at the beginning of the week was focused on developments in Europe after the election events, the focus now seems to shift to Fed Chairman Jerome Powell for investors to take cues from his testimony before the US Congress today and tomorrow.
The political situation in the US is also one of the factors that cannot be ignored by the market after the start of the presidential debate between Joe Biden and Donald Trump last week.
Heading into the end of the week, investors will assess the key indicator data for the US economy on Thursday, namely the consumer price index (CPI) which measures the rate of US inflation in June.
The expected decrease in inflation from the current level of 3.3% to the level of 3.1% will further increase the expectations of the Fed to implement measures to cut interest rates.
Also to be watched on Friday is the US producer inflation rate (PPI).
