EUR/USD Climbs on Draghi Optimism as Markets Await US Jobs Data

March 10, 2017 - Written by Tim Boyer

STORY LINK EUR/USD Climbs on Draghi Optimism as Markets Await US Jobs Data

The Euro US Dollar exchange rate continues to rise today after yesterday’s optimistic comments from European Central Bank (ECB) President Mario Draghi.

Draghi Positivity Continues to Boost EUR/USD

Yesterday’s ECB meeting saw interest rates and quantitative easing left untouched once again.

However, the following press conference with ECB President Mario Draghi proved surprisingly optimistic for investors expecting the Italian to offer a typically dovish assessment of recent inflation data.

As well as noting that the risk of ‘very negative scenarios’ had abated somewhat, Draghi also stated;

‘There is no longer that sense of urgency in taking further actions. That urgency that was prompted by the risks of deflation isn’t there.’

The Euro has been supported further today after the latest German trade figures showed the country saw rocketing demand for imports, as well as a sharp rise in exports.

This cut the current account surplus nearly in half to €12.8 billion and suggested that the Eurozone’s powerhouse economy was performing well at the start of the year.

USD Edges Lower as Markets Await Vital Non-Farm Payrolls Report

In a recent public appearance, Federal Reserve Chair Janet Yellen put the prospect of a rate hike next week firmly on the table.

‘We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect,’ Yellen said in prepared remarks ahead of a speech in Chicago.

The non-farm payrolls report is always one of the most, if not the most, influential pieces of US data when it comes to Fed rate hike bets.

Following Yellen’s recent comments, today’s NFP has become seemingly the only thing standing between the Fed and tighter monetary policy.

The US Dollar is therefore soft ahead of the release as traders wait to see the result.

EUR/USD Exchange Rate Forecast; Current Trajectory to be Upheld until NFP Release

It is highly unlikely the US NFP will print so poorly that it destroys market expectations of tighter monetary policy next week.

The rate of job creation in the private sector has remained between 100,000 and 300,000 since June 2016, with the last fall below that range being a surprise drop to 43,000 in May. A similar performance may knock the US Dollar, but this is an extremely pessimistic prediction.

With no Eurozone data left for release, EUR/USD exchange rates are likely to remain on the ascent until the payrolls report is published, at which point a strong figure could reverse the trend and see the Euro tumble.

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TAGS: Euro Forecasts