U.S. jobless data on Friday delivered a hard body punch to investors. The expectation going into Friday for the Non Farm Employment Change numbers was 161k, but the result was a mere 54k jobs added. To make things worse the previous month’s total was revised downwards also. The U.S. economic data has stoked worries about the possibility of growth slowing. The USD was heavily penalized against the EUR going into the weekend as investors began to weigh the notion that the Federal Reserve may not be keen on ending quantitative easing policies. Wall Street ended the week with another decline. The U.S. as always is being watched as a lynchpin for the global economy, and standing in the shadows remains the European debt situation.
The EUR/USD pair is in a curious spot with the Single Currency having turned in significant gains as it has battled back to the better values within its range against the Greenback. The question for investors is where will safe haven traders turn to? The USD has many concerns but traditionally has found that it gets stronger if a flight to quality gets underway, and it still could. However with sentiment being stirred via concerns about weak growth and debt, investors cannot be faulted for looking both as the States and the European Union with uncertainty. Gold has done remarkably well the past week even as other commodities have come under pressure. Physical resources have found less backing the past month as worries about the global economy have gained momentum, but Gold continues to keep its luster and as of this morning is around 1545.00 USD per ounce.
Today will be light with data. The Europeans will issue their Sentix Investor Confidence reading, but this will turn very few heads. The crux of the matter for sentiment will center on the States and Europe regarding their shaky economic outlooks. The GBP did gain on Friday but not with the same amount of steam the EUR showed against the USD. The U.K. will not publish any major data today or tomorrow, but on Wednesday Inflation numbers are likely to be brought forth. Germany will release Factory Orders and the broad Retail Sales numbers will come from Europe on Tuesday. Thus Sterling is likely to remain under a EUR centric mode.
The JPY gained on the USD Friday and once again finds itself touching the stronger parts of its range against the Greenback. Some of the political uncertainly in Japan is actually being seen as a positive opportunity for the country to try and get its economic house in order. However Japan faces an immense amount of challenges and the JPY remains within a long time range. The AUD has gained in trading the past two sessions and this has come on USD weakness and the gains that Gold has served up. The RBA from Australia will release its monetary policy decision tomorrow and this could serve up swift trading for the AUD.
Today and the entire week will likely be focused on the worries that surround the United States and Europe. A poor growth rate in the U.S. and continued unease from Europe regarding its debt crisis are bound to remain talking points. The EUR has done remarkably well the past week in light of the rather dark outlooks that continue to shadow Greece and other nations. The E.U. has done its best to create an air of stability for the EUR, but many analysts believe problems have been merely pushed down the road. Equity markets have shown strain and commodity markets have followed suit. Traders should expect volatility in the coming days as the market tries to find ‘true value’. Safe havens such as Gold and the CHF could find additional takers.
Written by bforex.com
