The Greenback Floats On Calm Water Today

After a week full of mixed U.S. economic data, a steady stream of negative news from the U.S. housing sector and even after the reduction of the interest rate, the greenback is only marginally lower. Friday’s dismal U.S. Non Farm Payrolls report sent the USD near record-lows against the EUR. The highly-anticipated NFP report showed that employers shed 17K jobs through the month of January - the first negative figure in 4 years. However, an impressive recovery eventually left the USD slightly higher through the late Friday New York trading session. The U.S. currency rose against the EUR after a report showing the U.S. manufacturing sector expanded in January, helping the greenback to recover from news of the contraction in the labor market. Nonetheless, the overall U.S. economy is cooling. The loss of 17K of jobs, as was reflected by the NFP report, makes it difficult to argue that the U.S. economy is not already in a recession. The forecast is that the Federal Reserve will need to continue to lower interest rates and unless there is a strong rebound in job growth during this month, it is realistic to expect an additional 0.25% point rate cut somewhere in the next 2 months.
Today the most significant news to come out of the U.S. will be the Factory Orders figures. The figure is expected to release at 2.3%, almost twice higher than in the prior month. During the week, traders will also closely follow the figures of the Nonfarm Productivity index as well as Unemployment Claims and the Pending Home Sales indices.
It appears that the negative US releases will cause the greenback to continue its bearishness, at least until a spur of positive releases will hit the board.