The Euro managed to avoid collapse. Overview for 02.07.2020

EURUSD was okay with falling but everything worked out.

EURUSD climbed into positive territory and is currency correcting successfully after several days of decline. The current quote for the instrument is 1.1264.

Investors’ attitude to risks went up a little bit, both due to the statistics and lack of concerns relating to the second wave of the coronavirus pandemic. 

Yesterday, the USA started reporting on its labor market. Traditionally, the first data came from the ADP and showed Non-Farm Employment Change. In June, the indicator showed 2,369K after being -3,065K in May and against the expected reading of 2,850K. there is no direct correlation between the ADP and the NFP to be published today (tomorrow the USA has a day off) but the report may still provide some insight into what is happening in the sector. 

The Construction Spending lost 2.1% m/m in May after decreasing by 3.5% m/m in the previous month. The indicator was expected to recover by 1.0% m/m but it didn’t happen. 

The June FOMC Meeting Minutes published yesterday said that the country’s economy would require support for quite a long time and the regulator intended to keep its monetary policy unchanged. FOMC representatives believed it would be necessary to set a straight course for the key interest rate and stick to it to prevent businesses and markets from being too volatile. 

As for the labor market, the Fed clearly understands that the recovery will take much time. Uncertainty in the economy is extremely high and risks – very significant. However, it wasn’t a surprise for anybody.