Home > All > Forex Market Review – Euro on down side ahead of Non-farm payrolls
Posted on February 3, 2012 by Trading Point Investment Research Desk at 7:19 am GMT
EURUSD drifted lower as markets were thin in Asian trading ahead of the weekend and US nonfarm payrolls data later today. The euro gave up most gains made in the US session after US Federal Reserve Chairman Ben Bernanke gave a bullish testimony on the US economy, pushing euro up to 1.3186 against the USD. The pair then drifted lower in Asia to reach 1.3113 after sentiment was dampened following a report showing expansion in China’s non-manufacturing industries slowed.
AUDUSD opened in Asia at 1.0709 and declined to a low of 1.0670 after the disappointing data from China which caused soggy sentiment in Asian markets across the board. China is a major trading partner for Australia so is sensitive to any economic data from that country.
USDJPY traded a very tight range between 76.13-76.25, not far from the post-October intervention low when the Bank of Japan intervened in the currency market to cap yen strength. Yen has been gaining strength recently due to uncertainty in the markets, and investors turn to the safe haven currency. Today the Japanese finance minister hardened his intervention rhetoric and prevented further downward pressure on the dollar-yen.
The Greek debt talks are still an issue and cause some hesitancy in markets but the focus today is primarily on key US jobs data, the Non-farm payroll report.
The jobs report is due at 1330 GMT, and the forecast so far is that the US economy generated 150,000 jobs in January, keeping the unemployment rate steady at 8.5 percent. This would be fewer than the previous 200,000 jobs added. Any positive move would boost risk sentiment and lift euro and other risk currencies, causing a dollar sell-off. However, any signal that the US economy is still weak and therefore add to the case for more stimulus from the Federal Reserve then this could also weaken the dollar because more quantitative easing weakens a currency.
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