EUR/USD: NFP to determine if bulls keeps the control
|EUR/USD has retreated after Trump's TikTok move, posting -0.30% losses on the day to 1.1842. Today, Sino-American relations, fiscal stimulus talks and, more importantly, Non-Farm Payrolls stand out. Yohay Elam, an analyst at FXStreet, said that the US jobs figures will determine if bulls are still in control.
Key quotes
“Negative Non-Farm Payrolls? That could turn to make the recent slide short-lived – like TikTok's videos. President Donald Trump hit ByteDance, the Chinese owner of the popular social network with an executive order that will likely hasten its firesale to Microsoft.”
“While TikTok has been in the spotlight for several weeks, the more surprising move came against WeChat – lesser-known in the West, but one of China's largest platforms – considered in some circles as more robust than Facebook, LinkedIn, and others. Shares in Asia and S&P 500 futures dropped, boosting the safe-haven dollar.”
“On the other hand, the greenback's gains remain limited amid stalled talks between Republicans and Democrats over the next relief package. Steven Mnuchin, America's Treasury Secretary, said that there has been some progress on several topics but no advances on others. The stalemate in talks is weighing on the dollar as it implies a weaker economy.”
“The tie-breaker is July's all-important NFP report. Expectations have been cooling down throughout the week. The economic calendar is pointing to an increase of 1.5 million jobs and a small decrease in the double-digit unemployment rate. However, real estimates range from a loss of jobs to an even greater one.”
“COVID-19 cases are rising also in the old continent, with over 1,000 daily cases in Germany, France, and Spain. Nevertheless, the old continent's better situation provides an advantage for the euro. German industrial output beat estimates with a bounce of 8.9% in June, also supporting the common currency.”
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