In response to Friday’s very weaker than expected jobs report, the dollar fell for the fourth straight day against a basket of major currencies.
Nonfarm Payrolls came in at 235K in August, below expectations of 720K and far below July’s 1053K. In addition, the PMI for Final Services dropped from 55.2 to 55.1 points, even though the experts were anticipating the indicator to remain stable at 55.2 points.
The Institute for Supply Management reported that activity in the services sector grew at a moderate pace in August, in part due to easing supply constraints and rising prices.
Despite a slight recovery in DXY, the ISM Services PMI fell unexpectedly, from 64.1 points in February to 61.7 points in March. In any case, keep away from the markets until the volatility subsides following these high-impact reports.
Dollar index fell to 91.941, its lowest since August 4, and was last down 0.2% at 92.014. About 0.7% of the index dropped for the week.
Below the weekly support line of 92.06, the DXY price has found support right on the upper median line of the descending pitchfork. It is possible, however, that rebound might only last temporarily.
As a result, the index could fall at any time. A lower index could lead to a further loss of ground for the USD compared to other major currencies.
Due to uncertainty over Fed policy, the dollar has been subdued. As of last Friday, Fed Chairman Jerome Powell said the central bank was not in a hurry to reduce its stimulus while job creation continues.
COVID-19 cases have increased in recent weeks, raising fears that the economic recovery could stall. The Fed will likely keep its rate on hold as a result of the jobs data.
In August, market observers considered the 92 level to be a key support level for the dollar.