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EUR/USD Struggles Above 1.0760 Amid US NFP and ECB Bets

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The EUR/USD is fluctuating above the key support level of 1.0760 but showing a loss of upside momentum. The US Dollar Index (DXY) attempted to defend its weekly low of 103.44 after a sell-off. S&P 500 futures are holding gains from an upbeat market mood. 

Federal Reserve policymakers favor a pause in the year-long policy-tightening spell, with some suggesting a potential pause at the next meeting.

The US Treasury yields have rebounded above 3.62%. Investors await the release of the Nonfarm Payrolls data (May) which will provide more clarity about Federal Reserve interest rate policy.

Check out the latest price, trends, and levels for EUR/USD trading at 1.0769 with a daily change of 0.0007 and daily change percentage of 0.07.

US Non-Farm Payrolls Expected to Rise Based on Upbeat Employment Data

Following the release of optimistic US ADP Employment Change numbers, experts predict that the official US Employment data will also remain solid. 

Analysts anticipate a 200K increase in Non-Farm Payrolls and urge monitoring of wage growth and labor force participation rates. 

The growth in labor force and potential inflation control make these indicators important to the Federal Reserve.

Analyst Comments: Strong May payrolls expected following April’s impressive 253K gain. Unemployment rate predicted to remain steady at 3.4% and average hourly earnings likely to increase by 0.3% MoM. However, upward movement in the USD will also depend on subsequent data such as ISM services and inflation. There is a risk of more downside in case of a miss, as the market is getting long USDs.

ECB Remains Hawkish Despite Softening Eurozone Inflation

The Eurozone’s May Harmonized Index of Consumer Prices (HICP) figures dropped lower than expected due to individuals reducing luxury spending in response to the high cost of living. 

Although some hoped for a pause in June due to the deceleration of inflationary pressures and Germany’s recession, European Central Bank President Christine Lagarde plans to raise interest rates by 25 basis points (bps) to address persistent core inflation.


US Factory Activity Plummets Amidst Tight Labor Market Conditions

The US economy presents a conundrum for policymakers as indicators reveal a stark divergence in direction. Alarm bells sounded off on Thursday when the ISM agency confirmed a seventh consecutive contraction in Manufacturing PMI for May. 

Figures indicate that US domestic factories are performing poorly, with economic data falling to 46.9 from a previously revised 47.0. Additionally, the New Orders Index shows a sharp decline to 42.6, lower than the estimated 44.9, and forward demand seems to be evaporating rapidly. 

Conversely, the ADP agency reports May’s Employment Change at 278K jobs, significantly higher than prior estimates of 170K.

While consumers are grappling with tight credit conditions and long waits to avail core goods, factories are operating at much lower capacity, nudged by high interest rates set by the Federal Reserve. 

This contradiction begs the question: Should the Federal Reserve continue to raise rates to address tight labor market conditions? Or should they pause this month, given the consistent slump in factory activities?

The GBP/JPY Currency Pair Is Poised To Reach A Multi-Month Peak Above 174.00

GBP/JPY aims for multi-month highs above 174.00 as bulls take control. The pair is rising for the second consecutive day towards its highest levels since February 2016. 

The divergence in monetary policy between the Bank of England and the Bank of Japan are key drivers, with UK data showing strength while Japanese officials defend easy-money policies.

US Treasury bond yields are also bouncing back. Traders should pay attention to market risk appetite and bond yields for further direction. 

Technical analysis shows some overbought conditions, but as long as the pair stays above the previous resistance line of 172.30, the bulls can remain hopeful.

Meanwhile; The Bank of Japan strives to hit the 2% inflation target as soon as possible, says Governor Kazuo Ueda. While trend inflation in the country is likely to heighten soon, achieving the target will take time. 

Ueda also believes it’s undesirable to set an explicit time frame, as the impact of monetary policy on the economy can vary depending on circumstances. 

However, the bank aims to reach the target sooner rather than later, and estimates it will not take longer than 10 years.


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  • Phyllis Wangui

    Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.