EUR/USD hits a new high before falling back after mixed US NFP drags on markets sentiment

  • EUR/USD spiked after the US NFP print, but mixed numbers confounded markets.
  • US NFP showed more jobs added, but steep revisions crimp risk appetite.
  • Next week: US and EU CPI inflation on Tuesday.

EUR/USD found some room on the top end on Friday, climbing to a fresh high for the week near 1.0980. Bullish momentum got pulled down after investors realized the US Nonfarm Payrolls (NFP) print was more complicated than the initial reaction.

US NFP job additions came in above expectations, but the previous print was steeply revised lower, taking it down from an 11-month high. European final Gross Domestic Product (GDP) figures broadly came in at expectations, and markets will be pivoting to face next Tuesday’s  Consumer Price Index (CPI) inflation prints for both the US and the euro area.

Daily digest market movers: Mixed US NFP confounds markets

  • February’s US NFP showed that 275K new jobs were added during the month, well above the forecast 200 K.
  • The figure is now higher than January’s print, which was revised sharply lower to 229K from the initial 11-month high of 353K.
  • US Average Hourly Earnings growth in February slowed more than expected to 0.1% MoM, below the expected 0.3% and down from the previous month’s 0.5%.
  • Annualized Average Hourly Earnings eased to 4.3%, missing the forecast of 4.4%. The previous period also saw a slight downside revision to 4.4% from 4.5%.
  • The EU’s final Gross Domestic Product (GDP) did not change from the preliminary release, with Q4’s QoQ GDP staying flat at 0.0%.
  • Germany’s YoY Producer Price Index (PPI) unexpectedly recovered ground in January, coming in at -4.4% compared to the forecast decline to -6.6% versus the previous month’s -5.1%.

Euro price today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Canadian Dollar.

USD   0.10% -0.31% 0.24% -0.03% -0.56% 0.02% 0.00%
EUR -0.10%   -0.42% 0.15% -0.14% -0.66% -0.09% -0.12%
GBP 0.32% 0.41%   0.56% 0.28% -0.24% 0.33% 0.30%
CAD -0.25% -0.15% -0.57%   -0.29% -0.80% -0.23% -0.27%
AUD 0.02% 0.13% -0.29% 0.28%   -0.52% 0.02% 0.02%
JPY 0.55% 0.66% 0.23% 0.79% 0.51%   0.59% 0.54%
NZD -0.02% 0.09% -0.33% 0.23% -0.05% -0.57%   -0.04%
CHF 0.02% 0.12% -0.31% 0.25% -0.02% -0.55% 0.03%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Technical Analysis: EUR/USD finds a new high before slumping back 

EUR/USD rose to a new eight-week high on Friday, climbing to 1.0981 before settling into the day’s range near 1.0930. The pair is on pace to finish in the green for a third straight week, and the Fiber is up over 2.2% from the last swing low into the 1.0700 handle.

EUR/USD has closed bullish for all but three of the last 17 straight trading days, but that run will be threatened if the pair closes below 1.0951. The Euro is trading well above the 200-day Simple Moving Average (SMA) at 1.0833, extending a bullish recovery after catching a firm bounce from a pullback to 1.0800.

EUR/USD hourly chart

EUR/USD daily chart

Euro FAQs

What is the Euro?

The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

What is the ECB and how does it impact the Euro?

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

How does inflation data impact the value of the Euro?

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

How does economic data influence the value of the Euro?

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

How does the Trade Balance impact the Euro?

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

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