Today, the US will publish the NFP employment report, which is important to the regulator before the new FOMC meeting this month. During its release, a surge in volatility is expected. If the data disappoints traders, the euro will go up but it is unlikely to move further than $1.1340. With upbeat statistics, the euro risks falling to $1.1212 as the dollar will strengthen its position across the entire spectrum of the market.
Looking back, we can recall that the last time the output of strong statistics on employment outside the US agricultural sector on the following day after Independence Day, which led to an increase in the yield of treasuries to 2.74% from 2.5% in 2013. History can easily be repeated but other options are possible.
The dollar paired with other major currencies changed slightly on Friday after yesterday’s lull. Consolidation on the eve of an important release suggests that Friday will be hot. The Fed chief says that the regulator is not enough to make decisions about adjusting the policies of a single report on the labor market and I would like to see at least three more. Markets paid no attention to this and they are determined. Strong statistics will allow us to consider weak May data as market noise. It will also be evident that the American economy is still in shape and looks much better than its competitors. With such a development of events, the yield of Treasury securities may soar and the demand for the American currency will increase.
The second consecutive closure of employment below the psychologically important level, plus 100,000, will return to the market concerns about the slowdown in the US economy. Traders will be carried away once again with the idea of reducing the rate by 50 bp in July. There is one interesting fact: officials of the American regulator are trying to calm the markets, which are alarmed by the inversion of the yield curve. Meanwhile, the model of the Federal Reserve Bank of New York points to the risk of economic decline by up to 30% over the next 12 months.
Buyers and sellers of greenbacks can remain in their own interests with an increase in employment at the level of the Bloomberg consensus forecast with 165 thousand. Dollar “bears” will find that the Fed will nevertheless adjust the policy at the next meeting due to the continued uncertainty surrounding the US-China trade conflict. Bull traders tuned to the US currency will insist on saving rates.
By the way, three-quarters of eighty Reuters respondents predict dollar success. According to experts, the “American” will be able not only to maintain the current position but also to grow by the end of this year. However, estimates for a more distant future are worse. The EUR/USD pair will rise to $1.17. Despite the fact that the forecast looks “bullish”, this is the lowest value of the consensus assessment for the last couple of years.
It is also worth noting that the optimistic report on the US labor market will make it possible to talk about the discrepancy in the monetary policy of the ECB and the Fed. In Europe, they will continue to talk about the need for QE while in America, they will be notified again of a pause in rate adjustment.
The material has been provided by InstaForex Company – www.instaforex.com
Today, the US will publish the NFP employment report, which is important to the regulator before the new FOMC meeting this month. During its release, a surge in volatility is expected. If the data disappoints traders, the euro will go up but it is unlikely to move further than $1.1340. With upbeat statistics, the euro risks falling to $1.1212 as the dollar will strengthen its position across the entire spectrum of the market.
Looking back, we can recall that the last time the output of strong statistics on employment outside the US agricultural sector on the following day after Independence Day, which led to an increase in the yield of treasuries to 2.74% from 2.5% in 2013. History can easily be repeated but other options are possible.
The dollar paired with other major currencies changed slightly on Friday after yesterday’s lull. Consolidation on the eve of an important release suggests that Friday will be hot. The Fed chief says that the regulator is not enough to make decisions about adjusting the policies of a single report on the labor market and I would like to see at least three more. Markets paid no attention to this and they are determined. Strong statistics will allow us to consider weak May data as market noise. It will also be evident that the American economy is still in shape and looks much better than its competitors. With such a development of events, the yield of Treasury securities may soar and the demand for the American currency will increase.
The second consecutive closure of employment below the psychologically important level, plus 100,000, will return to the market concerns about the slowdown in the US economy. Traders will be carried away once again with the idea of reducing the rate by 50 bp in July. There is one interesting fact: officials of the American regulator are trying to calm the markets, which are alarmed by the inversion of the yield curve. Meanwhile, the model of the Federal Reserve Bank of New York points to the risk of economic decline by up to 30% over the next 12 months.
Buyers and sellers of greenbacks can remain in their own interests with an increase in employment at the level of the Bloomberg consensus forecast with 165 thousand. Dollar “bears” will find that the Fed will nevertheless adjust the policy at the next meeting due to the continued uncertainty surrounding the US-China trade conflict. Bull traders tuned to the US currency will insist on saving rates.
By the way, three-quarters of eighty Reuters respondents predict dollar success. According to experts, the “American” will be able not only to maintain the current position but also to grow by the end of this year. However, estimates for a more distant future are worse. The EUR/USD pair will rise to $1.17. Despite the fact that the forecast looks “bullish”, this is the lowest value of the consensus assessment for the last couple of years.
It is also worth noting that the optimistic report on the US labor market will make it possible to talk about the discrepancy in the monetary policy of the ECB and the Fed. In Europe, they will continue to talk about the need for QE while in America, they will be notified again of a pause in rate adjustment.
The material has been provided by InstaForex Company – www.instaforex.com
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