EURUSD declines as investors remain cautious ahead of October’s US official jobs and manufacturing PMI data.
EURUSD fell from a new two-week high near 1.0890 in European trading hours on Friday. The major currency pair falls as the US Dollar (USD) recovers amid caution ahead of the release of the United States (US) Nonfarm Payrolls (NFP) and the ISM Manufacturing Purchasing Managers’ Index (PMI) data for October,will be publish during the New York session.
Economists predict the US economy to have added 113K new jobs, a considerable decrease from the 254K increase observed in September. The unemployment rate predicted to have maintained at 4.1%.
US presidential election could cause volatility in the main pair, since a Trump victory could affect the Eurozone’s export industry.
Investors will pay particular attention to employment data, which will have a substantial impact on market expectations for the Federal Reserve’s (Fed) interest rate path. Recent comments from Fed officials suggest that the central bank more focused on recovering labor market strength after gaining confidence that inflation will return to the bank’s target of 2%.
Traders completely pricing in a 25 basis point (bps) rate decrease at the Fed’s next meeting on Thursday, and the NFP unlikely to change this stance unless there is A great surprise. However, the statistics may have ramifications for the Fed’s December meeting: higher-than-expected payroll figures would indicate strengthening labor market conditions, which might lower Federal Reserve (Fed) rate cut bets, whereas bad employment numbers would increase them.
Investors will also be looking at October’s Average Hourly Earnings data, which is a significant metric of wage growth, as well as Manufacturing PMI data from the ISM and S&P Global.
In terms of wages, month-on-month salary growth predicted to be 0.3%, somewhat lower than 0.4% in September, with annual figures climbing steadily by 4%.
The ISM Manufacturing PMI is expected to be 47.6 in October, up slightly from 47.2 in September, indicating that the decreasing trend continues although at a slower rate. The final estimate of the S&P Global Manufacturing PMI projected to be unchanged from the 47.8 flash figure.
Daily Market movers: EURUSD falls as the US Dollar recovers.
EURUSD expected to fall slightly from near 1.0890 as the US dollar recovers. However, the Euro’s (EUR) performance against its peers remained strong due to a number of tailwinds. Faster-than-expected Eurozone GDP growth in the third quarter of the year, along with higher-than-expected inflation caused traders to reconsider bets backing the European Central Bank’s (ECB) larger-than-usual rate drop expectations for the December policy meeting.
Eurostat said on Wednesday that the Eurozone economy grew by 0.9% compared to the same quarter of the previous year, up from 0.6% in the previous quarter, owing primarily to According to preliminary figures, the German economy performed unexpectedly well. This reduced the immediate risk of an economic slowdown, but the picture remains uncertain ahead of Tuesday’s US presidential election.
Eurozone exports projected to suffer if former President Donald Trump defeats current Vice President Kamala Harris.
Eurozone exports projected to suffer if former President Donald Trump defeats current Vice President Kamala Harris. Trump promised a 10% tariff on all nations, with the exception of China, which expected to suffer far higher tariffs, in order to bolster domestic manufacturing capacity.
Another reason supporting the euro is the recent increase in Eurozone inflation. The preliminary Harmonized Index of Consumer Prices (HICP) increased more than expected to 2% in October, from 1.7% in September.
