05 April 2024, EUR/USD
Events to pay attention to today:
12:00 EET. EUR - Sales m/m
15:30 EET. USD - Nonfarm Payrolls
EURUSD:
This is due to weaker-than-expected US labour market data and a rise in Eurozone services PMIs. The euro is performing well against the US dollar, with EUR/USD trading at 1.0858, up 0.21%.
The US dollar remains steady despite initial jobless claims for the week ending 30 March rising from 212k to 221k, which exceeded forecasts of 214k. Meanwhile, the US trade balance revealed a deficit of $68.9bn, surpassing predictions and the previous month's figures, and hindering the US dollar from gaining strength.
US Treasury yields decreased, with the 10-year bond rate dropping to 4.31 per cent before rising again to 4.353 per cent.
Federal Reserve officials, headed by Philadelphia Fed chief Patrick Harker, have stated that inflation is too high. Richmond FRB President Thomas Barkin recently stated that the Fed may exercise patience in reducing interest rates. Although he expressed concern about the latest inflation data, he remains optimistic about achieving a soft landing. Meanwhile, Chicago Fed President Austan Goolsbee identified pressure on home prices as the biggest threat to inflation. He cautioned that if rates are capped for too long, the labour market could begin to deteriorate.
The EU services PMI improved in March, rising to 51.5 from 50.2 in February. Germany's reading also rose for the first time in six months.
Traders still predict the first ECB rate cut in June, while market participants expect the first Fed rate cut at the July meeting ahead of the Jackson Hole symposium.
Trading recommendation: Trade buy orders when the price reaches 1.0870.
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