EUR/USD has bounced back to the middle of the range, currently reading around 1.1820, and now depends on economic data. US fiscal stimulus talks and coronavirus fears are also playing a tug of war. Euro/dollar's next moves are highly dependent on news on these three fronts, according to FXStreet’s analyst Yohay Elam.
Key quotes
“President Trump said a ‘big number’ is coming in Friday's jobs report. Investors will be able to shape expectations ahead of July's NFP with a double-dose of data. ADP's private-sector labor market report is set to show an increase of over one million jobs last month, a slower rate than in June, yet still positive. The second crucial release is the ISM Non-Manufacturing Purchasing Managers' Index. The headline figure is projected to remain above 50, indicating expansion, yet the employment component may steal the show. Investors would like to see if hiring has been hit by the resurgence of the virus.”
“Democrats and Republicans have reported progress in agreeing on a new relief package for the economy, but state that an accord may come only next week. The overall package's size may also move markets. For investors, the more, the merrier, as any support is welcome in these dire straits. A larger fiscal package indicates more borrowing, and a potential increase in yields, thus lifting the greenback. A small package could send returns on US debt – and the dollar – down.”
“America's coronavirus case-curve has been showing signs of bending lower – and markets want to see that trend confirmed. On the other hand, daily deaths jumped above 1,000 on Monday – as the ‘weekend effect’ faded. Figures for Tuesday may go either way.”
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