The single European currency is trying to react and move away from the levels around 1.0750 where it noted lows a little earlier and more specifically around 1.0755 in an environment where confusion is the main feature as no strong direction is seen at the moment as all investors remain on hold ahead of the crucial announcement tomorrow at noon on the US labor sector.
Yesterday did not bring any surprises, the fluctuation range as most expected remained in a narrow range with the mild downward momentum of the European currency remaining on the agenda.
Yesterday’s preliminary US employment data disappointed investors, but cannot overshadow tomorrow’s Non-Farm Payrolls announcement, which carries much more weight and is capable of being a game changer.
In general, the picture remains the same and at the moment there is a strong prospect that the European Central Bank will cut interest rates much earlier than the corresponding Fed.
In any case, it is too early to draw any clear conclusions, as a lot of data, especially on inflation, will have to be followed before the final decisions of Presidents Lagarde and Jerome Powell.
On today’s agenda, the announcement on the path of the European economy stands out, no major surprises are expected, but the fear of recession has not yet disappeared, something that if it rises on the agenda, the European currency could be challenged again.
The scenario of limited fluctuation without a strong direction is the most likely for today, as it seems that if there are no surprises, investors will prefer to take a wait-and-see attitude before tomorrow’s US employment data.
