Market News and Charts for August 07, 2020
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The pair failed to break out from a major resistance line, sending the pair lower towards a key support line. The US is due to report its Non-Farm Payrolls (NFP) report today, August 07. The report for July is expected to drop following the two (2) consecutive increase in the change of number employed. Expectations were at 1,600K compared to previous increase in the report of 4,800K. Investors are worried that employees who are laid off during the pandemic might remain unemployed in the coming months. At the height of the pandemic in April, more than 20.5 million US employees became unemployed. Only 7,309K were able to find a new job from May to June. And the small projection in the change of number employed for July will cause a sell-off in the US dollar. Meanwhile, recent reports from the US neighbor, Mexico, suggests that its economy is recovering. Today’s CPI report is expected to increase by 0.65% compared to 0.55% in June.
The pair is expected to break down from a major support line, sending the pair lower towards its October 2018 low. Norway’s soaring house prices and increasing flight demands highlights that recovery of once the epicenter of the coronavirus pandemic, Europe. House prices between the months of June and July increased by 0.9% or 5.0% on a year-over-year basis. This was despite the fact that most European economies are still suffering from recession. Analysts suggest that the optimism by consumers was brought by the increasing prices of crude oil in the global market. Norway’s major export product was oil and any surplus from its trade was being added to the country’s sovereign wealth fund. The increasing per capita liquidity in Norway is making the Norwegian krone a safe-haven currency investment among investors. Meanwhile, the US still relies on huge stimulus packages to keep its economy afloat at the expense of the US dollar.
The pair will continue its downward movement in the coming sessions. The reelection of Andrzej Duda is set to revitalize the Polish economy. Under his first term, Poland became one of the fastest growing economies in the European Union. In 2019, its annual GDP growth reached 4.1%, placing Poland in fifth place. Aside from that, its fellow V4 country, Hungary, ranks second on the list. Analysts said that the rising economic prosperity in Eastern Europe is set to change the economic and geopolitical landscape in Europe. As the coronavirus pandemic ravages throughout Europe, Polish finance minister Jerzy Kwiecinski reassures investors that the country has more room to cater the current crisis. He said Poland has a current account of $34 billion and that his office is expecting a contraction of 4.6% in 2020 to be followed by a recovery in 2021 with 4.0% growth. The economic recovery in the European region is expected to steal investors from the US.
The pair will bounce back from its support line and break out from its resistance line. Analysts are expecting America’s unemployment rate to decline by 0.6% to 10.5% in today’s report. However, expectations for NFP were the opposite. The change in the number of unemployed people in the US for July is projected to increase by 1,600K, lower from June’s 4,800K figure. Despite this, investors will push the pair higher with the current health, economic, and political turmoil in Israel. The number of COVID-19 cases continue to soar, sparking fears of a second wave of the pandemic in the country. The reduced economic activity due to stricter lockdown will also take a toll on Israel’s economy. A chief economist hinted at the possibility of the country contracting by as much as 7.2% this 2020. The failure by the government to contain the virus and help its economy resulted in its citizens protesting against Israel Prime Minister Benjamin Netanyahu.
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