EURUSD falls below 1.0800 on caution ahead of a slew of macroeconomic data from the United States and the Eurozone this week.
EURUSD fell below the round-level mark of 1.0800 during Tuesday’s North American session. The major currency pair is under pressure as the US Dollar (USD) seeks to extend its gains ahead of a slew of US macroeconomic data this week and growing uncertainty over the US presidential election, which will take place on November 5.
The US Personal Consumption Expenditure Price Index (PCE) data for September, flash Q3 Gross Domestic Product (GDP), Nonfarm Payrolls, and ISM Manufacturing Purchasing Managers’ Index (PMI) data for October scheduled for release. The data will be critical in determining market expectations for the Federal Reserve’s (Fed) interest-rate path for the rest of the year.
Economists predict the US economy to have produced half of the jobs it added in September, the Manufacturing PMI to remain below 50.0, inflation to have declined modestly, and GDP to have grown at a stable 3% annualized rate.
US JOLTS Job Openings are expected to have decreased somewhat in September.
Slower job growth is likely to strengthen market expectations for Fed rate cuts in December. According to the CME, markets are pricing in a 25 basis points (bps) fall in borrowing rates in November and December. The FedWatch tool.
Investors will pay close attention to the US JOLTS Job Openings data for September, which will be release at 14:00 GMT on Tuesday. Job openings expected to have decreased slightly to 7.99 million from 8.04 million in August.
Daily market digest: EURUSD is under pressure ahead of major US/Eurozone data.
EURUSD falls below 1.0800 during North American trading hours on Tuesday, but remains within a narrow range from the previous six trading days. The Euro (EUR) struggling to find direction as investors seek new clues regarding the extent of the European Central Bank’s (ECB) probable interest rate decrease at its final monetary policy meeting of the year in December.
Traders are skeptical about the amount of the ECB’s probable interest rate decrease in December.
The ECB widely expected to lower its deposit facility rate. Again, traders are unsure whether the central bank would continue the rate-reduction cycle at the normal pace of 25 basis points (bps) or opt for a greater decrease. Market expectations for a significant ECB rate decrease rose after a few officials warned about the risks of inflation lingering below the goal rate of 2%.
The possibility of the German economy entering a recession at the end of the year has contributed significantly to concerns about low inflation. Investors will pay special attention to the flash Q3 GDP for both Germany and the Eurozone, which will be release on Wednesday, for additional clues on economic development.
Economists believe that German GDP dropped by 0.3% in Q3 compared to the same quarter a year ago. after remaining flat in the second quarter. During the same period, the Eurozone’s GDP expected to grow by 0.8%, stronger than the previous reading of 0.6%.
On the same day, investors will pay attention to the preliminary German and Spanish Harmonized Index of Consumer Prices (HICP) data for October. The annual German HICP predicted to have increased at a stronger pace of 2.1%, while inflation in Spain is expected to have remained below 2%.
