Select Language

EUR/USD trades with mild gains above 1.0800, eyes on US/Eurozone GDP, German inflation data

Breaking news

EUR/USD trades with mild gains above 1.0800, eyes on US/Eurozone GDP, German inflation data

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2024.10.30 08:01
EUR/USD trades with mild gains above 1.0800, eyes on US/Eurozone GDP, German inflation data

update 2024.10.30 08:01

  • EUR/USD posts modest gains to near 1.0820 in Wednesday's early Asian session. 
  • US job openings dropped to the lowest level since early 2021. 
  • The ECB is widely anticipated to cut its Deposit Facility Rate again this year.

The EUR/USD pair recovers to around 1.0820 during the early Asian session on Wednesday. The upside for the major pair remains limited amid ongoing uncertainty ahead of the US presidential election and anticipation of key US data releases.

Job openings were down by 418,000 to 7.443 million by the last day of September, the lowest level since January 2021, according to the Labor Department's Bureau of Labor Statistics in its Job Openings and Labor Turnover Survey, or JOLTS report. This figure came in worse than the expectation of 7.99 million. 

Meanwhile, the US Conference Board's Consumer Confidence Index rose to 108.7 in October from an upwardly revised 99.2 in September, above the market consensus of 99.5. This figure registered the highest in nine months as perceptions of the labor market improved. 

Traders increase their bets that the US Federal Reserve (Fed) will only cut rates by 25 basis points (bps) in the November meeting, attracting buyers of the US Dollar (USD). Later on Wednesday, the US ADP Employment Change for October and the advanced Gross Domestic Product (GDP) for the third quarter might offer some hints about the size and the pace of the US Fed rate cut. 

Across the pond, the European Central Bank (ECB) is widely expected to cut its Deposit Facility Rate again, but traders are split on whether the ECB will continue the rate-cut cycle with the usual pace of 25 basis points (bps) or go for larger reductions. Money markets are still pricing in nearly 50% odds of the ECB rate reductions by half a percentage point in the December meeting.

Investors will keep an eye on Germany's preliminary Consumer Price Index (CPI) inflation data, along with the flash Q3 GDP Growth Rate from Germany and the Eurozone. The ECB's Schnabel is scheduled to speak later in the day. 

Euro FAQs

The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB's primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates - or the expectation of higher rates - will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB's 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone's economy.

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.



 

 


Date

Created

 : 2024.10.30

Update

Last updated

 : 2024.10.30

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Dow Jones Industrial Average surges on soft US NFP data, Fed easing hopes rise

The Dow Jones Industrial Average (DJIA) posted solid gains of close to almost 300 points or 0.71% on Friday, on softer-than-expected economic data, reinforcing investors' hypothesis of further easing by the Federal Reserve.
New
update2024.11.02 04:04

US Dollar rebounds after NFPs and ISM PMIs

The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, rebounded intraday despite the weak jobs data as annual wage inflation rose to 4%, indicating that inflationary pressures remain elevated.
New
update2024.11.02 04:00

Canadian Dollar mixed after US NFPs, ISM PMIs

The USD/CAD currency pair saw a mild decline in Friday's session, reaching a low of 1.3920.
New
update2024.11.02 02:10

GBP/USD Price Forecast: Climbs post weak US jobs report, eyes 100-day SMA

The Pound Sterling erased some of its Thursday's losses against the Greenback and rose 0.56% above its opening price after a dismal US jobs report reassured investors the Federal Reserve would continue to ease policy.
New
update2024.11.01 23:56

RBNZ: A high bar for a 75bps cut - Standard Chartered

We think the bar is high for a 75bps OCR cut given the prevailing economic backdrop.
New
update2024.11.01 23:56

EUR/CAD Price Prediction: Decisively breaks out of top of pattern

EUR/CAD rallies and pierces decisively above the slanting roof of the price pattern it had been trading in since the beginning of August.
New
update2024.11.01 23:40

USD/CAD corrects after US NFP, remains well-supported above 1.3900

The USD/CAD pair corrects mildly to near the round-level support of 1.3900 in Friday's New York session.
New
update2024.11.01 23:21

U.S. October job counts seem distorted by hurricanes/strikes - RBC

The tiny 12k payroll employment gain in October was heavily distorted by the impact of hurricanes, a large strike in the manufacturing sector, and an unusually low initial survey response rate, RBC' economists note.
New
update2024.11.01 23:20

EUR/JPY Price Prediction: Pulling back within uptrend

EUR/JPY is pulling back after rising above the ceiling of its multi-month range and breaking above the cluster of major moving averages lying just above.
New
update2024.11.01 23:05

US ISM Manufacturing PMI drops to 46.5 in October vs. 47.6 expected

The business activity in the US manufacturing sector continued to contract at an accelerating pace in October, with the ISM Manufacturing PMI falling to 46.5 from 47.2 in September.
New
update2024.11.01 23:05

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel