EUR/USD Fundamental Forecast – September 5, 2016

The EUR/USD soared 42 points immediately after the lackluster jobs data in the US hit the wires. The Nonfarm payroll report showed that unemployment remained at 4.9% and the total NFP jobs printed at 151k against expectations of 180k, but the previous month’s report saw an upward revision of 20k jobs meaning that this report was not as bad as it was on the surface. The US actually created 700k jobs over the last three months. The initial kneejerk reaction sent the dollar tumbling but the markets should recover later in the session.

The more disturbing data was released yesterday showing that factory activity contracted in August for the first time in six months as manufacturers continued to grapple with a sluggish global economy and the oil industry’s downturn.

The unexpected decline raises questions about the industry’s recovery, the health of the economy, and casts doubt on the growing theory that Federal Reserve officials will raise interest rates when they meet later this month.

A closely-watched index of manufacturing activity dipped to 49.4 from 52.6 in July, the Institute for Supply Management said Thursday. A reading above 50 indicates the sector is expanding, while below 50 means contraction. Economists expected a more modest decline to 52.

Leaders of the U.S., China and other big Group of 20 economies are attending a two-day meeting this weekend, with the global economy expected to be one of the main discussion topics. China, the G-20 meeting’s host, has made trade a major theme of the meeting while other governments also want to tackle climate change, cutting excess capacity in in steel and limits on use of tax havens.

FxEmpire provides a wide variety of analysis on a daily, weekly and monthly basis ranging from our exceptional technical analysis as well as our in-depth fundamental analysis along with our daily news and market updates. To get the best understanding of each asset it is important to review the short term daily analysis with the longer term monthly reports. To get email notification when each of these are posted please sign up for our daily newsletter.

Upcoming Economic Events that you should be monitoring:

 September 5, 2016

Government Bond Auctions

Date Time Country Auction

Sep 06 11:00 Austria Holds bond auction

Sep 06 11:30 UK 1.5% 2026 Gilt

Sep 06 11:30 Germany Holds I/L bond auction

Sep 07 10:30 Denmark Holds bond auction

Sep 07 11:03 Sweden Holds bond auction

Sep 07 11:30 Germany Eur 5bn 0% Aug 2026 Bund

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction