The Euro was higher again against the United States Dollar on Friday as shaky eurozone economic data didn’t deflect markets from optimism that US interest rates could start to fall this year, possibly as soon as September.
German industrial production shrank unexpectedly in May, official figures showed, with a 2.5% on-month contraction mocking the markets’ hopes for a 0.2% rise. France’s trade gap also yawned ahead of expectations, coming in at EUR8 billion ($8.6 billion), rather than the EUR7.2 billion tipped beforehand.
At face value, this doesn’t look like the recipe for a seventh straight day of gains for EUR/USD, but that’s what we’re looking at.
Of course, official US payroll data will be the ultimate decider. That’s coming up on top of the economic bill later in the global day. This week has already seen some evidence that the labor market is softening. Jobless claims rose by 238,00 in the week ending on June 29, slightly above forecasts.
The financial markets are looking for a June rise of 190,000 nonfarm payrolls, well below April’s 272,000, and a steady overall jobless rate of 4%. Expect on-target or weaker data to keep early rate cuts very much on the table, while any upside surprises could see the Dollar take off once more, although bulls will have a lot to do if they’re going to counteract the considerable momentum weighing on the greenback against many major rivals.
EUR/USD Technical Analysis
