Forex snapshot

The euro is broadly unchanged since the US revealed stronger-than-expected jobs data on Friday. The pound is subdued this morning as little ground has been recovered in the wake of the US jobs report.

Euro and dollar currency
Source: Bloomberg

Euro flatlines overnight

The euro is trading at $1.2537. The single currency has managed to pull back some of Friday’s losses even though Germany announced that factory orders dropped 5.7% in August — the consensus was for a decline of 2.4%.

The fact that the euro is trading higher, despite dreadful figures from Germany, suggests that traders are no longer shocked by poor figures from the eurozone and their attention will be on the Federal Reserve and when it will look to increase interest rates. We are not expecting any economic announcements for the US today but Fed members Narayana Kocherlakota and William Dudley are speaking tomorrow, Mr Kocherlakota at 6.20pm and Mr Dudley at 8pm (London time). Hawkish tones will keep the pressure on the euro.

The euro is close to a two-year low versus the greenback. As Alastair McCaig stated, Mario Draghi outlined the details of the asset-backed security scheme. Any rally in the euro will be short-lived and the $1.25 mark could be breached tomorrow evening pending the comments from Mr Kocherlakota and Mr Dudley.

Sterling attempts $1.60

Sterling is trading at $1.5975. The US dollar continues to dominate the headlines and, as I stated above, the statements from Fed members tomorrow could ensure the pound stays under the $1.60 level.

Sterling dealers will also be keeping an eye on tomorrow’s manufacturing production figures from the UK and the National Institute of Economic and Social Research GDP estimate at 9.30am and 3pm respectively (London time).The race continues between the UK and the US over who will raise rates first, and robust numbers from the UK could swing the sentiment back in its favour.

A pullback in the pound could see it back to $1.6161. If the downward trend continues, sterling could be below $1.59 within the next few days. 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.