The jobless numbers will be released from the U.S. today and because of this the broad markets can be expected to practice caution before the figures are known. The EUR continued to hammer away at the USD on Thursday and has climbed back to the stronger parts of its range versus the Greenback. The EUR/USD stands on a perch just like investors who are proverbially sitting on a fence as news is waited on. A Greece bailout is supposed to be announced today, but as of yet no official agreement has been made public, except for the rumors that a deal will get done. While the weekly Unemployment Claims in the States proved negative yesterday, somehow the debt situation of Europe has not caused a wave of backlash against the EUR yet. The USD continues to be weak because investors believe the Fed may have to continue some type of quantitative easing regarding monetary policy. What investors appear to have not reacted to is the possibility long term that Greece and other European nations will continue to need various forms of bailouts.
If the Non Farm Employment Change numbers from the States today prove poor this may put gasoline on what has already been a weak equities market for the past month. Commodity prices have turned in mixed results as well. Crude Oil has been stuck in a range for weeks that hovers around 100.00 USD a barrel. Gold as of this morning is around 1530.00 USD an ounce. Caution has been palpable for investors as economic data globally has essentially added to the debate that the possibility for a double dip recession exists. Added to this storm of sentiment are concerns about reactions that will ensue within the Greek population and other nations such as Portugal and Spain if tougher austerity measures are forced upon the people. What happens politically if enough pressure is put on sovereign governments to the point that officials wishing to keep their jobs are forced to back pedal or hold new elections which could change policy stances?
As the EUR/USD traded towards the higher points of a strong range for the Single Currency, the GBP reacted rather sluggishly against the Greenback. The Services PMI data will come from the U.K. today. The Sterling has climbed in trading the past week against the USD, but it has not done so with the same vigor the EUR has accomplished. These results have added to a rather muddled outlook regarding short term trading which continues to see a ranging market. The GBP is still within a EUR centric mode.
Before the Non Farm Employment Change numbers are released from the States today the broad markets are likely to see opportunistic range trading. Investors may be tempted to take positions before the Jobless numbers are released, but they this will be done with a speculative flair. Wall Street has had a poor month of returns and today’s outcome could have a major impact on risk sentiment. If the numbers come out worse than the expectation 194K job added this will definitely set off fireworks. The USD has lost ground to the EUR in trading this week, but the question becomes where will money flow if risk adverse trading get stronger.
While the U.S. has major concerns regarding its economic outlook hinging on the jobless numbers today, the EUR still has many questions regarding its problematic debt situation.
The AUD has climbed back to the higher parts of its range, but like the overall market appears locked in a range this morning. The JPY has been extremely consolidated per its standard routine.
The Non Farm Employment Change numbers will be watched intently today and going into the weekend traders will have to be attentive to the broad markets into the late hours this Friday.
Written by bforex.com
