The EUR/USD pair is trading at $1.3668, down slightly on the day as traders dally ahead of the non-farms payrolls and US unemployment reports at 1.30pm (London time). The data is considered the most important of the month.
According to the Bloomberg survey we are expecting an increase of 185,000 new jobs to have been created and for the unemployment rate to drop to 7.2%. The Federal Reserve has pegged its monetary policy to the unemployment rate so if the rate falls more than expected, we could see a decline in the euro.
It has been a quiet day in terms of economic data from the eurozone. The Fed’s next meeting is in less than two weeks, and some traders feel the central bank could reduce its bond-buying scheme before the new year. The growth figure from the US yesterday exceeded expectations, which is a sign the stimulus package is working.
If the unemployment report misses expectations we could see the euro move higher; since yesterday’s article we have cleared the high of $1.3620, so could be on a path to $1.38.