US Dollar affected by weakening US economy

The US Dollar has been affected by additional signs of a weakening US economy, and media discussions about a potential recession are expected to intensify following the US jobs data.

A crucial factor is that risk conditions have also worsened further. Equity markets have faced pressure, leading to strong demand for defensive currencies like the yen and Swiss franc, while the Euro has also received some net support.

Currency markets will turn to Monday morning's PMI release from the USA to set the direction for the week. The reading is forecast to be 51, compared to the previous 48.8, which would suggest growth.

The remainder of the week is relatively light on data for the Dollar, with jobless claims being the only significant release. Attention will be centered on Middle East tensions, the state of the Chinese economy, and the upcoming presidential elections in the USA.

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