Euro Rallies on Weak US ADP Employment Data and Positive Sentiment

The  euro today rallied higher against the  US dollar following the  release of  disappointing employment data from the  USA in  the  early American session. The  EUR/USD currency pair was trading sideways in  the  mid-European session following a  brief decline during the  Asian session largely driven by  market sentiment.
The  EUR/USD currency pair today dropped from an  opening high of  1.1659 to  a  low of  1.1614 in  the  early European session before rallying higher and  recouping most of  its losses.
The  currency pair’s initial decline was triggered by  investor concerns regarding the  situation in  emerging markets and  the  ever-present US-China trade war jitters. The  release of  the  German factory orders for  July by  the  Federal Statistical Office also drove the  pair lower as  the  print missed expectations. However, the  pair stabilized later in  the  European session following Italian budget headlines that eased investor concerns about the  country’s fiscal policies and   stabilized the  Italian and  German bond yield spreads. The  release of  the  positive Markit Germany construction PMI also boosted the  pair.
The  currency pair rallied higher following the  release of  the  US ADP employment change report, which came in  at  163,000 new jobs versus the  expected 188,000 jobs. The  positive initial jobless claims data released by  the  Department of  Labor shortly after had a  muted impact on  the  pair.
The  currency pair’s short-term performance will be influenced by  the  US ISM non-manufacturing PMI, US factory orders, and  durable goods orders due for  release later today.
The  EUR/USD currency pair was trading at  1.1643 as  at  13:00 GMT having risen from a  low of  1.1614. The  EUR/JPY currency pair was trading at  129.47 having dropped from a  high of  129.82.

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