EUR/USD wobbles around 1.1440 ahead of US NFP data

EUR/USD trades sideways around 1.1440 as investors await the US NFP data for May.
Easing US-China trade worries have supported the US Dollar.
The ECB reduced its key borrowing rates by 25 bps on Thursday.

Sagar Dua FXStreet

The EUR/USD pair trades in a limited range around 1.1440 during Asian trading hours on Friday. The major currency pair consolidates as investors await the United States (US) Nonfarm Payrolls (NFP) data for May, which will be published at 12:30 GMT.

Investors will pay close attention to the US official employment data as it will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook. According to the estimates, the US economy added 130K fresh workers, lower than 171K hired in April. The Unemployment Rate is seen as steady at 4.2%.

Ahead of the US employment data, the US Dollar (USD) ticks up after holding late-Thursday’s recovery move. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, edges higher to near 98.80.

The USD Index bounced back on Thursday after comments from US President Donald Trump in a post on Truth.Social suggested de-escalation in trade tensions between Washington and Beijing. "The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both countries.” Trump wrote. The scenario of stable trade relations between the US and China is favorable for the US Dollar, given that Beijing is key exporter to the US.

Meanwhile, the Euro (EUR) underperforms across the board while comments from European Central Bank (ECB) officials suggest that the monetary expansion cycle has been concluded for now. ECB policymaker and Governor of the Bank of Estonia Madis Muller stated during early European trading hours that he is comfortable with President Christine Lagarde’s comments, which indicated that the “policy-easing cycle is almost finished”.

Euro PRICE Today

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

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.11%	0.05%	0.30%	-0.08%	0.17%	-0.12%	0.17%
EUR	-0.11%		-0.05%	0.16%	-0.18%	0.00%	-0.22%	0.06%
GBP	-0.05%	0.05%		0.21%	-0.12%	0.06%	-0.16%	0.11%
JPY	-0.30%	-0.16%	-0.21%		-0.32%	-0.02%	-0.30%	-0.20%
CAD	0.08%	0.18%	0.12%	0.32%		0.24%	-0.04%	0.22%
AUD	-0.17%	-0.00%	-0.06%	0.02%	-0.24%		-0.22%	0.08%
NZD	0.12%	0.22%	0.16%	0.30%	0.04%	0.22%		0.28%
CHF	-0.17%	-0.06%	-0.11%	0.20%	-0.22%	-0.08%	-0.28%

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 US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

The comments from Christine Lagarde came in the press conference after the monetary policy announcement in which the ECB reduced the Deposit Facility rate by 25 basis points (bps) to 2%, as expected. This was the seventh straight interest rate cut by the ECB and eighth since June last year when it started the monetary expansion cycle.

Economic Indicator

Nonfarm Payrolls

The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.

Why it matters to traders?

America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

GBP/USD: Downward-sloping trendline near 1.3470 remains key barrier

The British pound faces selling pressure against its major currency peers, trading 0.1% lower at around 1.3420 against the US Dollar during the European trading session on Tuesday.

EUR/USD flatlines above 1.1500, awaits US jobs data

EUR/USD holds steady around 1.1505 in European trading hours on Tuesday. Markets remain cautious ahead of a slew of US jobs data, starting with the JOLTS Job Openings Survey later today. However, the downside appears capped by hot Eurozone inflation in July, bolstering the case for a European Central Bank rate hike at the next meeting.

Gold holds steady above $4,050; hawkish Fed bets favor bearish traders

Gold remains confined in a range below the $4,100 mark through the early European session as traders opt to wait for further developments surrounding the Middle East crisis. Meanwhile, the uncertainty over US-Iran peace talks continues to act as a tailwind for the safe-haven US Dollar.

Aave: Bearish RSI divergence risks a 20% drop despite steady DeFi deposits

Aave (AAVE) extends a mild near-term recovery on Tuesday, holding above its 50-day Exponential Moving Average at $90.80. Aave protocol’s V3 deployment on Monad blockchain recorded over $500 million in deposits over the last month, reflecting increased user adoption.

US JOLTs report in focus

In the US, the June JOLTs report will be in the spotlight. Job openings have increased modestly this year, which has historically predicted rising wage cost pressures ahead. June trade balance data will also be released in the afternoon and the preliminary reading pointed towards a stable trade deficit from May. The Fed's Schmid (non-voter, hawk) will be on the wires overnight.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.