The US dollar ended the past trading week among the weakest currencies on the Forex market, along with the Japanese yen and the Swiss franc, due to risk appetite among traders. Negative domestic employment data also hurt the greenback. Commodity currencies were the strongest.
The most important piece of news this week was the report that the United States and China are going to resume their trade negotiations. The efforts of China’s central bank to bolster the nation’s slowing economic growth added to the positive sentiment. And the legislation that should prevent Great Britain leaving the European Union without a deal was yet another reason for investors to feel more optimistic.
Meanwhile, nonfarm payrolls showed much slower growth of US employment in August than was expected. The report was not entirely bad, though, as wage inflation accelerated unexpectedly.
According to CME FedWatch, the probability of an interest rate cut by the Federal Reserve later this month is no longer 100%. Still, chances of a 25 basis cut are more than 90%, which is a negative outlook for the US currency.
EUR/USD edged up from 1.0989 to 1.1025 over the week. NZD/USD jumped from 0.6296 to 0.64260. At the same time, USD/JPY rallied from 106.03 to 106.90.
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