Euro stabilizes as Spain posts strong job data

Kenny Fisher MarketPulse

The euro has stabilized on Friday. In the European session, EUR/USD is currently trading at 1.0296, up 0.3% on the day. The euro fell as much as 1.2% a day earlier and fell below the 1.03 line for the first time since Nov. 2022.

The new Euro locomotive is – Spain?

The eurozone economy wasn’t exactly on fire in 2024. The Ukraine-Russia war led to increases in gas and oil prices, millions of war refugees have strained the economy and many eurozone countries have boosted their defense budget as relations with Moscow have chilled. In addition, global demand has been weak and the incoming Trump administration could spell tariffs and even a trade war.

Germany, which for decades was the locomotive of Europe, hasn’t recovered since the corona pandemic. Competition from China has hurt the key automotive industry and the government coalition has collapsed, resulting in political instability. France and Italy, the second and third largest economies in the eurozone, are also struggling.

The bright light is this gloomy picture has been Spain, the fourth-largest economy in the eurozone. “Sunny Spain” isn’t just a catchy phrase for winter-weary tourists, but also reflects a resilient economy. According to the European Commission, Spain’s economy is expected to have expanded by an impressive 3% in 2024. In contrast, Germany’s GDP is projected to have contrasted by -0.1%. Spain’s manufacturing and services sectors are expanding, in contrast to the eurozone’s three largest economies which are showing contraction.

The European Central Bank entered an easing phase in June and has lowered rates at the past three straight meetings. The central bank is keeping an eye on inflation but is expected to continue lowering rates in order to boost the weak economy. The ECB meets next on January 30.

EUR/USD technical

EUR/USD is testing resistance at 1.0289. Above, there is resistance at 1.0353.
There is support at 1.0203 and 1.0139.

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.