Forexlive Americas FX news wrap: Dollar is the weakest of the majors but off session lows

Author: Greg Michalowski | Category: News

Talk the talk about new Forex news for North American traders on August 5, 2020

In other markets today:

  • Spot gold is trading up $19 or 0.94% at $2038.10. Another new record all-time high was reached at $2055.79. The low price reached $2009.77
  • Silver at an even stronger day to the upside. It is currently trading up $0.93 or 3.58% at $26.94. The high price extended to $27.14. The low price fell to $25.38
  • WTI crude oil futures race to the highest level since early March as it searched to a session high $43.52. The low price reached $41.47 early in the session. The inventory data for the week came and with a larger than expected drawdown but not as large as the API private data. As a result there was some profit-taking against the highs for the day. The current price is trading at $42.17. That's up $0.47 or 1.13%. Technically the 50% of the 2020 range comes in at $41.71. On the topside the 200 day moving average is at $43.92. 
Today, the ADP employment change data came in much weaker than expected with a rise of 167K vs 1200K estimate. The US employment statistics will be released on Friday with nonfarm payroll expected to show a 1500K increase.  Although much weaker, the ADP data has not done a great job mimicking the Labor Department employment data.  Case in point, the prior month's number was revised to 4313K vs 2369K initially reported (so only off by about 2 million).  HMMMMM.

In other news, the trade deficit came in at $-50.7 billion. I know COVID is getting in the way, but little progress has been made in the trade deficit as it stands nearer high deficit levels. 

Good news came from ISM service index which rose to 50.1 from 55.0 estimate (and preliminary).  

The USD started the day as the weakest of the major currencies, and moved even lower into the London close. However, after the dollar index (DXY) fell to a low of 92.563 failed to get to and through the July 31 low of 92.546, the sellers turned to buyers in the NY afternoon session.  A modest  move higher has taken the DXY to 92.846 currently.  

Talk the talk about new _Forex news for North American traders on August 5, 2020

The dollar was still the weakest of the majors going into the close, but there is some potential that the double bottom may be the short term bottom as well.  Tomorrow will be a key day for the greenback.  PS. a new low in the DXY would be the lowest low since May 2018. 

Below is a ranking of the strongest to weakest today. The CHF and EUR overtook the AUD as the strongest. The USD and JPY tightened up the battle for weakest by the close.

US dollar was the weakest of the majors
In other news today, the negotiations for the next coronavirus stimulus bill continues to be stalled.  

It seems the GOP is leaning a little bit more toward an emergency employment number of $400 per week vs. the original post of $200. State and local relief is still a problem point of discussion according to officials

US stocks continued their run to the upside. The S&P and down close higher for the 4th consecutive trading day. The S&P is only 2% away from its all-time high. The NASDAQ index close at a record level once again. It is now on a 6 day winning streak.  European shares also closed  higher but with mixed up and down results.

Major indices closed higher and near the highs for the day
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