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NZD/USD at $0.6681 on bad day in markets for dollar

Chris Lee

The US dollar was down again in the forex markets as the week came to a close, with traders appearing to turn their attention towards a release covering the country’s labour market.

At one point over the day, the greenback was spotted at 92.864 in its index – an artificial measurement of the dollar’s behaviour calculated by aggregating its performance in individual pairs.

This placed it close to its lowest point on the price chart in around two years.

It appears set to be stuck in the doldrums for the foreseeable future.

Several long-term factors appear to be hampering the dollar’s prospects, one of which is the febrile political situation in the US.

President Donald Trump used an executive order on Thursday to prevent businesses in the US from engaging in commerce with ByteDance.

ByteDance is a China-based firm that operates the popular mobile application TikTok.

The decision, which Trump said pertained to US security, is just the latest in a round of what are largely perceived to be isolationist moves from his administration.

The country is also thought to be responding badly to the public health emergency posed by the coronavirus pandemic.

According to a press report on Thursday, one group of scientists is predicting the possibility that the coronavirus could cause 295,000 deaths in the country before the year is out.

However, the upcoming event that was preoccupying traders the most on Friday was the nonfarm payrolls report, which illustrates the state of the labour market in the country without agriculture being in the equation.

The report is due out on Friday.

According to analysts, it is likely to show that the rate of new jobs in July was slower than the rate in June.

Should this occur, it is likely to be seen by traders as a negative sign – and an indication that the pandemic is continuing to stymie the chances of the US economy growing again.

Elsewhere around the world, the riskier currencies did well.

The Antipodean currencies performed especially well, with the Australian dollar – which is typically treated as a barometer of global risk sentiment for various reasons – seen at $0.72223.

This was near to its best performance in well over a year.

The development came despite the news from the US regarding ByteDance and TikTok.

The Australian dollar has traditionally performed badly when conditions in China, one of its major trading partners, are negative.

In New Zealand, meanwhile, the local dollar was seen at $0.6681.

In a sign of the paradoxes facing the foreign exchange market at the moment, however, the safe-haven currencies also managed to surge.

The greenback was spotted at 0.9109 at one point in its pair with the Swiss franc, one of the world’s most prominent safe havens.

This position was its worst in around five years.

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Chris Lee
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