With the U.S. dollar becoming the weakest currency following the release of the disappointing July U.S. employment report, market participants are likely to keep a close eye on its downside potential.

With the U.S. dollar becoming the weakest currency following the release of the disappointing July U.S. employment report, attention is turning to how much further it might fall.

05.08.2024

Last weekend, the U.S. dollar came under pressure after the July U.S. employment report released on Friday, the 2nd, showed that nonfarm payrolls came in at 114,000—well below the market forecast of 175,000—andand the unemployment rate worsened by 0.2 percentage points from 4.1% to 4.3%. As a result, the U.S. dollar became the weakest currency immediately after the release of the data. The USD/JPY pair fell from 149.750 to 146.432, marking its fourth consecutive daily decline.

Among European currencies, the pound fell against the yen following the Bank of England’s policy rate announcement. The GBP/JPY pair fell from 190.519 to 187.398.The hourly RSI fell to 25. On the 4-hour chart, the pair is trending lower after encountering resistance at the 10-period moving average, and on the daily chart, the price has closed below the 200-period SMA while the RSI has dropped to 14; therefore, we will be watching closely to see if a corrective rebound develops.

Today, China’s Caixin PMI is scheduled for 10:45, Indonesia’s real GDP for 13:00,at 14:00, India’s Services PMI and Singapore’s Retail Sales; at 16:00, Turkey’s Consumer Price Index and Turkey’s Producer Price Index; at 16:50, France’s Non-Manufacturing PMI; at 16:55, Germany’s Non-Manufacturing PMI;at 17:00, the Eurozone Non-Manufacturing PMI; at 17:30, the UK Non-Manufacturing PMI; at 18:00, the Eurozone Producer Price Index; at 22:45, the U.S. PMI; and at 23:00, the U.S. ISM Non-Manufacturing Index.We will carefully monitor the downside potential of the U.S. dollar, which has become the weakest currency following the deterioration of the U.S. July employment report.