EUR/USD Flat After Weak US Employment Report

Employment data from the United States was very weak, but surprisingly enough it drove EUR/USD down, not up as one might have expected. Better-than-expected data about the US services sector also had an unexpected impact as it drove the dollar down against the euro. In the end, the conflicting macroeconomic indicators left the currency pair almost flat. This week is very important as the European Central Bank will announce its monetary policy decision tomorrow, while US nonfarm payrolls will be released on Friday.
ADP employment demonstrated growth by 175k in January, which was rather weak compared to the predicted 197k. Moreover, the December increase was revised from 238k to 227k. (Event A on the chart).
ISM services PMI advanced from 53.0% in December to 54.0% in January, a bit more than was forecast by specialists who promised an increase to just 53.6%. (Event B on the chart.)
Crude oil inventories increased by 0.4 million barrels last week and are in the upper half of the average range for this time of year. This is compared to the prediction of 2.2 million growth and the previous week’s increase of 6.4 million. Total motor gasoline inventories increased by 0.5 million barrels and are well above the upper limit of the average range. (Event C on the chart.)
Yesterday, a report on factory orders was released, showing a drop by 1.5% in December, which followed an increase by the same rate in November. The median forecasts promised a drop by 1.9%. (Not shown on the chart.)


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