6 Dec 2013
Session recap: Euro remains victorious ahead US employment report
FXstreet.com (San Francisco) - A choppy day in the currency market with better than expected US economic data, the BoE and ECB rate decisions and the Mario Draghi speech on monetary policy. It seems the US Dollar doesn't stand a chance against the Euro and the Yen lately as the EUR/USD climbed to highs in more than a month and the USD/JPY declined below the 102.00.
In the US, strong GDP data in the Q3, mainly driving by a jump in inventories, and less jobless claims fueled concerns about the taper but effect was concentrated in stocks as it logged its fifth daily decline in a row. However, a less dovish than expected Mario Draghi didn't offer any new initiative and affirmed the ECB is in no rush to ease again.
The ECB raise its GDP forecast by 0.1% amid positive developments in the economy and commented that last meeting’s cut has been proved successful and needed. The ECB also expects the inflation to remain below the 2.0% target for the next 2 years.
The EUR/USD jumped above the 1.3600 level in the American session with the Euro closing around highs since October 31st at 1.3675. "As the market settles and waits for the US employment figures early Friday," comments FXstreet.com chief analyst Valeria Bednarik. "The 4 hours chart technical readings maintain a bullish tone, supporting an extension up to 1.3700 before finding short term selling interest."
With the United States' economy advancing at 3.6% pace, the nonfarm payrolls expectations are about 180k new jobs in November, meaning more pressure to Fed starts to taper in the next few meetings and launching the US dollar to the upside.
However, "Part of the [USD] weakness can be attributed to concerns that stronger growth in Q3 means weaker growth in Q4," BK analyst Kathy Lien affirms. "Even Federal Reserve President Lockhart expressed his skepticism about the latest release by saying that a strong third quarter GDP report does not make a trend. However if non-farm payrolls rise by more than 165k tomorrow, tapering in December is still on the table."
Main headlines in the American session:
ECB leaves policy unchanged, Draghi in focus
US: Initial Jobless Claims falls to 298,000
US: Q3 GDP upwardly revised to 3.6%
US: PCE rises 2.0% during Q3
ECB's Draghi: Recent data proves rate cut in November fully justified
US: Factory Orders drop by 0.9% in October
Canada: Ivey PMI plunges to 48.2 in November
Wall Street extends decline on taper concerns
In the US, strong GDP data in the Q3, mainly driving by a jump in inventories, and less jobless claims fueled concerns about the taper but effect was concentrated in stocks as it logged its fifth daily decline in a row. However, a less dovish than expected Mario Draghi didn't offer any new initiative and affirmed the ECB is in no rush to ease again.
The ECB raise its GDP forecast by 0.1% amid positive developments in the economy and commented that last meeting’s cut has been proved successful and needed. The ECB also expects the inflation to remain below the 2.0% target for the next 2 years.
The EUR/USD jumped above the 1.3600 level in the American session with the Euro closing around highs since October 31st at 1.3675. "As the market settles and waits for the US employment figures early Friday," comments FXstreet.com chief analyst Valeria Bednarik. "The 4 hours chart technical readings maintain a bullish tone, supporting an extension up to 1.3700 before finding short term selling interest."
With the United States' economy advancing at 3.6% pace, the nonfarm payrolls expectations are about 180k new jobs in November, meaning more pressure to Fed starts to taper in the next few meetings and launching the US dollar to the upside.
However, "Part of the [USD] weakness can be attributed to concerns that stronger growth in Q3 means weaker growth in Q4," BK analyst Kathy Lien affirms. "Even Federal Reserve President Lockhart expressed his skepticism about the latest release by saying that a strong third quarter GDP report does not make a trend. However if non-farm payrolls rise by more than 165k tomorrow, tapering in December is still on the table."
Main headlines in the American session:
ECB leaves policy unchanged, Draghi in focus
US: Initial Jobless Claims falls to 298,000
US: Q3 GDP upwardly revised to 3.6%
US: PCE rises 2.0% during Q3
ECB's Draghi: Recent data proves rate cut in November fully justified
US: Factory Orders drop by 0.9% in October
Canada: Ivey PMI plunges to 48.2 in November
Wall Street extends decline on taper concerns