- Majors in ranges on a low volatility environment ahead of NFP.
- US dollar consolidates gains, remains under weekly highs.
The EUR/USD pair is about to end the day modestly lower. Since Wednesday, the pair is moving in a 50 pips range between 1.1200 and 1.1250. During today’s American session most majors held in small ranges. The worst performer was the pound amid Brexit uncertainty.
“Financial markets were little changed awaiting further details on US-China trade talks, which are currently underway. The US is mulling over giving China until 2025 to fulfill its trade promise, which includes a commitment to purchase more US agricultural products and allowing full ownership for US companies in China. In a positive sign that the two sides are getting closer to finalizing a deal, Chinese Vice Premier Liu He is to meet US President Trump later today. Ongoing talks are expected to pave the way for Trump and Xi to seal a trade deal. A schedule for a leaders-level meeting could be unveiled as early as this week,” said BBVA analysts. The news boosted risk appetite but not the EUR/USD pair that bottomed at the beginning of the US session at 1.1205.
The pair then gained momentum and climbed to 1.1225. As of writing was trading at 1.1220, down 20 pips for the day. The DXY is up 0.20% and US yields consolidate its recent rebound adding support to the greenback.
On Friday, the key economic numbers will come from the NFP report. “Non-farm payrolls are predicted to add 180,000 workers in March, following February’s 20,000. Manufacturing employment will rise by 10,000 up from 4,000 in February. The U-3 unemployment rate is expected to be stable at 3.8%. Average hourly earnings are forecast to gain 0.3% on the month down from 0.4% in February and to be unchanged at 3.4% on the year. Labor force participation is thought to decline to 62.9% from 63.2%”, explained Joseph Trevisani, Senior Analyst at FXStreet.
Regarding the euro, on Friday data to be released includes industrial production from Germany and there will be the Eurogroup meeting. Today the European Central Bank released the minutes from its latest meeting. According to BBVA analysts, the document confirmed a “wait-and-see” approach, in line with market expectations, “and affirmed the extension of the forward guidance until end 2019 while reinforcing datadependency amid uncertainty over the global economic outlook”. Previously, a weaker-than-expected Reading on German factory orders did not affect the euro.
The EUR/USD pair continues to trade near the 2019 low it reached in March at 1.1170/75, but so far avoiding a close below 1.1200. The upside remains capped by 1.1250. It is flat for the week so far, waiting to hit fresh 22-month lows or a move above 1.1250 that could point to a stronger recovery for the euro.
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