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EUR/USD Fundamental Forecast – May 9, 2016

By:
Barry Norman
Published: May 6, 2016, 11:56 UTC

The EUR/USD gained 22 points as the dollar weakened ahead of the jobs data although the markets are also trying to factor in comments from Federal Reserve

EUR/USD Fundamental Forecast – May 9, 2016

The EUR/USD gained 22 points as the dollar weakened ahead of the jobs data although the markets are also trying to factor in comments from Federal Reserve Williams who warned of 2-3 rate hikes this year. The dollar firmed against the euro and yen on Friday ahead of the April US nonfarm payrolls due later in the day that could support the greenback. despite a report Wednesday indicating that companies added the fewest jobs in three years. Private payrolls grew just 156,000 in April, well below the economist consensus of 195,000, according to payroll services firm ADP and Moody’s Analytics.

Goldman experts, however, were unswayed by the ADP disappointment. The firm expects Friday’s nonfarm payrolls report to show growth of 240,000, well above the Street expectation for 200,000 and an upward revision to Goldman’s already bullish call for 225,000.

This week’s stronger dollar halted an almost 7% fall against a basket of other leading currencies since January. A strong dollar can reduce demand for oil as it makes the dollar-traded commodity more expensive for buyers using other currencies.

Markets heard from a number of Fed officials yesterday and broadly speaking the message seems to have been the same. That the decision remains data dependent but as of now, June is a live meeting. The markets are just refusing to believe it at this stage. The problem is, if the Fed fails to communicate this properly, it could find itself in a position come June in which it wants to hike but is unable to due to the chaos it would cause in the markets.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

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Upcoming Economic Events that you should be monitoring:

Monday, May 9, 2016

Cur. Event Actual Forecast Previous
  GBP Halifax House Price Index (MoM)   0.1% 2.6%  
  GBP Halifax House Price Index (YoY)   9.6% 10.1%  

 

Government Bond Auctions

Date Time       Country           Auction

May 09 17:20 Italy Announces details of bond auction

May 09 N/A Ireland Details of bond auction on May 12

May 10 11:30 Germany Holds I/L bond auction

May 11 11:03 Sweden Holds bond auction

May 11 11:30 Germany Eur 5bn Jun 2018 Schatz

May 12 11:10 Italy Holds bond auction

May 12 17:20 Sweden Details of I/L auction on May 19

May 12 N/A Ireland Holds bond auction

 

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