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- Nov, 20 British Pound Fails to Find Support at 20-Day SMA, Euro Maintains Narrow Range
- Nov, 19 Euro Loses Ground Despite OECD Forecast, British Pound Weakens for Third Day
- Nov, 18 British Pound Holds Narrow Range Following BoE Minutes, U.S. Dollar Loses Ground on Risk Appetite
- Nov, 17 British Pound Fails to Hold Ground Despite the Rise in U.K. CPI, Euro Consolidate
- Nov, 16 Euro Poised to Test Yearly High, British Pound Continues to Trend Sideways
- Nov, 13 Euro Halts Three-Day Decline as Economy Emerges From Recession, British Pound Rally Supported by 20-Day SMA
- Nov, 12 Euro Forms Top Following Three-Day Decline, British Pound Finds Support Ahead of 20-Day SMA
- Nov, 11 British Pound Stumbles on BoE Comments, Euro Continues to Push Towards Yearly High
- Nov, 10 British Pound Halts Five-Day Rally as Fitch Sees Risk for UK’s Credit Rating
- Nov, 09 Euro Poised to Test Yearly High, British Pound Breaks Out of Range to Hit 3-Month High
- Nov, 05 British Pound Advances as BoE Expands Asset Purchases to GBP 200B Versus GBP 225B Expected
- Nov, 04 Euro, British Pound Advances Ahead of the Federal Open Market Committee Interest Rate Decision
- Nov, 03 Euro, British Pound Falter – U.S. Dollar Regains Footing Ahead of FOMC Interest Rate Decision
- Nov, 02 Euro Holds Range, British Pound Weakens on Speculation for Further Easing
- Oct, 30 British Pound Halts Four Day Rally, Euro Continues to Eye 20-Day SMA
- Oct, 28 Euro, British Pound Stumble as Investors Curb Appetite for Risk
- Oct, 29 Euro, British Pound Advance Ahead of U.S. 3Q GDP
- Oct, 27 British Pound Remains Supported by 50-Day Moving Average, Euro Continues to Hold Range
- Oct, 26 Euro Hits Fresh Yearly High, British Pound Weighed by Speculation for Further Easing
- Oct, 23 British Pound Tumbles Lower as 3Q GDP Disappoints, Euro Hits Fresh Yearly High
The Euro has started to give back earlier gains after failing to hold above 1.49000, as we have started to see dollar strength ahead of the U.S. labor report. A 1.0% improvement in September German factory orders failed to maintain bullish sentiment despite output improving for a seventh straight month.
Talking Points
• Japanese Yen: Losing Ground As Risk Appetite Grows
• Pound: PPI Weak But Still Enough To Put BoE on Alert
• Euro: Rising German Factory Orders Fail To Sustain Gains
• US Dollar: U.S. Non-Farm Payrolls To Dictate Dollar Direction
Dollar Finding Support Ahead Of Non-Farm Payrolls, Will Rising Unemployment Reverse Sentiment?
The Euro has started to give back earlier gains after failing to hold above 1.49000, as we have started to see dollar strength ahead of the U.S. labor report. A 1.0% improvement in September German factory orders failed to maintain bullish sentiment despite output improving for a seventh straight month. A 7.5% jump in consumer goods offset a 1.1% drop in intermediate goods which may be a sign that producers are anticipating an improvement in domestic demand. The Euro-zone economy continues to show signs of improvement which was recognized by ECB president Trichet in his post rate decision press conference. However, the central bank remained on hold as growth inflation risks continue to be balanced. However, p[olicy makers did signal that at their next meeting they will start to lay the ground work for their exit strategy from current stimulus measures. In fact, they took the first step by ending 12-month loans to commercial banks starting next year.
The pound has remained relatively range bound overnight despite producer prices rising less than expected, leaving the door open for the BoE to remain on hold. The price of goods leaving British factories rose 1.7% in October compared to the same month last year, accelerating from a 0.4% rise in September, the Office for National Statistics reported Friday. On a monthly basis, prices were up 0.2%. Economists had forecast a 0.4% monthly rise and a 1.8% annual increase. Stripping out food, beverages, tobacco and petroleum, prices rose 0.3% between September and October for a 2% increase compared to October 2008. The central bank added £25 billion to their asset purchase program but is anticipating that inflation wil rise sharply over the near-term on higher energy costs and a weak sterling.
The dollar has started to take back earlier losses as we near the release of the U.S. October Non-farm payroll report. Early forecasts are for the economy to have lost 175,000 jobs which is a significant improvement from 265,000 the month prior. Early indicators have pointed toward an inline print with initial jobless claims improving by 20,000 and ADP reporting the private sector gave back 203,000 jobs. However, weakness in the employment component of the Service sector ISM could be a red flag and warn of a worse than expected result. The figure to watch may be the unemployment rate as economists are looking for it to reach 9.9%. A print of 10.0% could raise concerns over future domestic growth and spark risk aversion which should be dollar positive. Conversely, a strong report has the potential to push equity markets higher which could be a weighing factor for the greenback. Yet, traders must be aware that the dollar could find support on signs that he labor markets is rebounding based on its implication for future interest rate policy.
Will The EUR/USD Maintain Its Rally? Join us in the Forurm
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To discuss this report contact John Rivera, Currency Analyst: jrivera@fxcm.com
DailyFX provides forex news on the economic reports and political events that influence the currency market.
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- British Pound Fails to Find Support at 20-Day SMA, Euro Maintains Narrow Range
- Euro Loses Ground Despite OECD Forecast, British Pound Weakens for Third Day
- British Pound Holds Narrow Range Following BoE Minutes, U.S. Dollar Loses Ground on Risk Appetite
- British Pound Fails to Hold Ground Despite the Rise in U.K. CPI, Euro Consolidate
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