During Monday’s Asian trading hours, the EUR/USD pair exhibits caution, hovering just above the 1.0700 midpoint, with the current trading figure pegge
During Monday’s Asian trading hours, the EUR/USD pair exhibits caution, hovering just above the 1.0700 midpoint, with the current trading figure pegged around 1.0782, marking a modest 0.05% daily gain.
Over the weekend, noteworthy commentary emerged from the European Central Bank (ECB). Pierre Wunsch, the Governor of the Belgian Central Bank and a distinguished member of the ECB Governing Council, hinted at potential expansionary measures, indicating that while there may be a pause on the horizon, discussions about ceasing rate hikes are premature. This sentiment was complemented by ECB policymaker, Francois Villeroy de Galhau, who emphasized the proximity to an interest rate peak, although asserting that discussions around rate reductions are premature.
On the American front, recent statistics revealed a performance that surpassed anticipations. August’s US Nonfarm Payrolls (NFP) recorded 187K, outpacing the predicted 170K and July’s 157K.
Furthermore, the unemployment rate showcased a decline to 3.8%, contrasting with both market expectations and previous data set at 3.5%. While the monthly Average Hourly Earnings demonstrated a 0.2% growth, it slightly missed the 0.3% projection. The US Manufacturing PMI also displayed resilience with a reading of 47.6, surpassing the preceding 46.4 and outdoing the consensus of 47.0.
Analysts are increasingly forecasting an imminent end to the Federal Reserve’s rate-tightening period.
As per the CME FedWatch tool, market dynamics have encapsulated a status quo outlook for the Fed’s September meeting. The prospects of rate increments in the latter months of the year have waned to roughly 35%. In spite of this backdrop, the US Dollar sustains its upward trajectory for the sixth consecutive week, although its weekly gains have moderated.
With the US market observing the Labor Day holiday, the spotlight shifts to Europe. Key data releases such as the German Trade Balance for July and the Eurozone Sentix Investor Confidence for September will be closely monitored. Moreover, utterances from the German Buba President Joachim Nagel, followed by ECB President Lagarde’s address, are expected to provide trading direction for the EUR/USD currency pair.
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