The United States dollar rallied against its major peers and regained its lost ground on Friday during the European session, since the economy generated higher than anticipated employment opportunities in March, following weak numbers in the earlier month. President Donald Trump’s statement also strengthened the greenback regarding the fact that America and China were just a month away from a conceivably “epic” trade deal.
Labor Department data revealed that in March the number of non-farm workers increased by 196,000 after recording an updated 33,000 jobs in February. In contrast to the 20,000 jobs initially reported for the earlier month, economists anticipated non-farm employment to grow by about 180,000.
In March, the jobless rate remained unchanged from February and consistent with economist projections of 3.8 %. The March Jobs Report highlighted the continued resilience of the labor market and diminished economic concerns.
China’s Xinhua news agency reported that Friday’s three-day conversations focused on concerns such as technology transfer, the safeguard of copyright laws, non-tariff initiatives, farming, and compliance. The dignitaries headed were US Trade Representative Robert Lighthizer, Chinese Vice-Premier Liu He, and Treasury Secretary Steven Mnuchin.
Since last year, Washington and Beijing have enforced customs duties on over $360 billion worth of goods, which have had a negative impact on the manufacturing industries as the global economy is slowing. China has been trying to sort out the problem by offering to buy large quantities of US commodities and take action to show that overseas intellectual property is being protected.
Nine months have passed since the trade war began between the top two economies. Therefore, the announcement was not cheered by the market which had anticipated the Trump could announce a summit date to ink a final agreement with the Chinese President Xi Jinping.
However, Trump was optimistic about the talks. Following a meeting with Liu He, Beijing’s trade envoy, Trump said: “We will probably know over the next four weeks. It may take two weeks after that. It’s looking very good.”
Investors applauded ongoing evidence of progress in the US-China trade talks, following a recent round of top-level trade discussions. The two parties have held productive talks over the last two days, particularly on crucial problems such as the verse of business and economic treaties.
The US and Chinese officials have forecasted cautious optimism for months, but the final mile has proven to be the toughest, with both parties supposedly challenging if and how the punitive tariffs on Chinese products levied by Washington in 2018 should be abolished. Robert Lighthizer, US Trade Representative, told journalists that key issues had to be addressed.
The greenback may temporarily see further upside against the euro because of strong job data and optimism about the US-China trade deal.
Technically, the greenback has strengthened to 1.1217 against the euro, after a decline to 1.1245 soon after the release of the data. Should the dollar stay strong, 1.08 is the next support level to watch for. The EUR/USD pair is moving within a descending channel. Additionally, the oscillator of the moving average has a negative reading. As a result, we can expect the EUR/USD pair to move down in the short-term.
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