FX.co ★ The dollar is given another chance

The dollar still fails to consolidate, and the US statistics is to blame for this. On the one hand, the number of initial applications for unemployment benefits decreased from 231,000 to 230,000, although they were waiting for growth to 238,000. However, the number of repeated applications increased from 1,940,000 to 1,953,000, while waiting for a reduction to 1,928,000. As a result, the number of applications increased by 12,000. In turn, the index of business activity in the manufacturing sector in Europe fell from 60.6 to 59.6, but this was already awaited. But in the UK, it declined from 56.2 to 55.3. However, the US statistics made a much more positive impression.

Today, the index of business activity in the U.K. construction sector is expected to decline from 52.2 to 52.0. Also, the rate of growth in producer prices in Europe should slowdown from 2.8% to 2.3%. All this will put pressure on the single European currency and the British pound just before the release of data on the U.S. labor market, which should be quite good. With a stable level of unemployment, the labor force share may increase from 62.7% to 62.8% in the total population. New jobs outside Agriculture amounting to 180,000 should be created, which is greater than 32,000 in the previous month. Also, the growth rate of the average hourly wage should grow from 2.5% to 2.6%. The forecasts are extremely positive, and if they are justified, the dollar will finally get the opportunity to strengthen its positions.

The EUR/USD pair may fall to the level of 1.2400.

The GBP/USD pair has all chances of a decline to the level of 1.4150.