Vasilis Tsaprounis
Independent Analyst
The single European currency is trying to approach 1,11 level having developed very mild upward momentum in the wake of yesterday's announcements where some preliminary data on the US jobs sector disappointed.
Despite the mild reaction of the European currency, the general picture of the market does not show any significant changes and investors remain extremely cautious awaiting tomorrow's announcement on the new jobs outside the agricultural sector and the level of unemployment in the United States which is expected to determine the decisions of Fed on September 18.
I remind that the contraction of the labor sector in the United States acted as one of the catalysts that weighed on the US currency and drove the euro to significantly higher prices 2 weeks ago.
Let's not forget that in several statements Fed's President has sent the message that further cooling in the labor sector is not desirable and he could use interest rate cuts as a weapon to stop the increase in the unemployment rate and by extension to prevent a possible recession in US economy.
The possibility of an increase of 50 basis points is not the main scenario and if it happens it will be a shock event that will affect the US dollar very negatively, but is something that I would not adopt especially if Friday's does not disappoint.
On today's agenda, the employment ADP figures - America’s largest payroll providers - stand out, which often act as a harbinger of Friday's jobs data and are followed by the market with enough interest.
While today's rich agenda is completed by Eurozone Retail Sales and the survey on the course of the service sector in US.
The exchange rate staying close to the 1,1050 - 1,1100 level with some small extensions on either side of the levels is a likely scenario for today.
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