EUR/USD Fundamental Analysis – for the week of August 9, 2016

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Published: Aug 6, 2016, 06:05 UTC

The EUR/USD dipped at the end of the week as the greenback rallied on extremely good jobs data. The pair closed the week at 1.1086 at the very bottom of

The EUR/USD dipped at the end of the week as the greenback rallied on extremely good jobs data. The pair closed the week at 1.1086 at the very bottom of its range seeing a loss of almost 0.8% for the week. In the coming week the euro is expected to remain depressed and the dollar should climb as the Fed members turn hawkish. All indications is that the euro should continue to drop this week. The dollar jumped on Friday on strong U.S. employment data that boosted expectations of an acceleration in economic growth and raised the probability of a Federal Reserve interest rate hike this year.

Forecast-beating U.S. nonfarm payrolls numbers, released a day after the launch of a Bank of England monetary easing package, sent U.S. Treasury yields higher.

U.S. nonfarm payrolls rose by 255,000 in July as hiring increased broadly after an upwardly revised 292,000 surge in June, the U.S. Labor Department said. Economists had expected a rise of 180,000.

“This is definitely a very solid report, and I think Fed policymakers have to be very pleased with this,” said Kathy Jones, fixed income strategist at Charles Schwab in New York.

Fed fund futures priced in an 18 percent chance the Fed will raise rates at its policy meeting next month, up from 9 percent late on Thursday.

The euro entered August around the mid-point of its descending trend channel from early May with medium-term risk of a decline toward the June lows near 1.09 and Q1 lows just above 1.07. Widening interest rate differentials should maintain pressure on EURUSD over the medium-term.

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This Week’s Economic Events That You Should Be Monitoring:

Date	Country	Name	Volatility	Previous	Consensus
8/9/2016	GBP	NIESR GDP Estimate (3M)	3	0.6
8/10/2016	AUD	RBA’s Governor Stevens	3
8/10/2016	NZD	RBNZ Interest Rate Decision	3	2.25	2
8/10/2016	NZD	Monetary Policy Statement	3
8/10/2016	NZD	RBNZ Press Conference	3
8/12/2016	EUR	Gross Domestic Product M	3	0.3	0.3
8/12/2016	EUR	Gross Domestic Product Y	3	1.6	1.6
8/12/2016	USD	Retail Sales (MoM)	3	0.6	0.4