The USD continued to trade near the lower parts of its range versus the major currencies on Friday and this took place on the heels of a poor Non Farm Employment Change number. The U.S. is on holiday today for the Independence Day holiday. Thus, the global marketplace may be relatively quiet with sudden bursts of volatility because of lower volume. The result of the jobless report from the United States highlights that a recovery remains difficult to grasp and that job creation has not been solved. While the Unemployment Rate fell, what concerns investors (and likely the American public) are the statistics which shows that private sector employment is simply not improving and that companies are reducing the amount of pay employees are earning. Europe will release Retail Sales figures today, along with Final Services PMI and the Sentix Investor Confidence reading. None of these numbers are expected to show significant gains. The U.K. is scheduled to publish is Services PMI outcome and this report is also expected to show a flat outcome.
Tomorrow the U.S. will release the ISM Non Manufacturing PMI data and it too is forecasted to show that the economy is still struggling. Wall Street and other global equities have taken the recent flurry of poor economic data badly and have shown little faith in long term prospects. The EUR finds itself around a six week high against the USD, and the JPY also continues to perform strongly. However, the reasons for these two results are significantly different. The EUR still has many questions regarding some of the E.U. nations and their ability to meet their debt obligations. There are also concerns regarding liquidity issues. While the ECB continues to make optimistic pronouncements, investors fear has not gone too far away. The EUR’s recent move may be a short term bounce based on beliefs the Single Currency has been oversold. The JPY continues to behave as a magnate for safe haven trading as obvious questions about long term prospects hit Asia and their counterparts. The GBP has done well the past couple of weeks and this has developed as the U.K. government has taken a stance with tough austerity measures. Today’s trading may test ranges, but the results will have to be looked upon with suspicion in lighter than normal markets due to the American holiday.
Written by bforex.com
