The Euro started New Year by updating the highs. Overview for 08.01.2018

At the beginning of the second trading week of 2018, the main currency pair is moving close to September’s highs.

The EUR/USD pair is opening the second week of 2018 with a slight growth after last Friday’s fluctuations, but is still trading close to highest levels over the previous four months. The current quote for the instrument is 1.2027.

The main reason why the USD got weaker is investors’ expectations and fears that the US Federal Reserve may increase the key rate this year too slowly. To be honest, these fears are pretty unreal and unwarranted, but sometimes this is all what investors need. The statistics published by the USA last week was mostly positive with some minor exceptions. On the other side, the reports on the Manufacturing and Services PMIs published by the Eurozone, turned out to be better than expected and, as a result, supported the Euro.

The ADP Non-Farm Employment Change added 250K in December against the expected reading of 190K. However, the Non-Farm Employment Change added only 148K in the same month after expanding by 252K in November and against the expected number of 189K. At the same time, the Unemployment Rate remained unchanged at 4.1%, which is quite good. The Average Hourly Earnings added 0.3% m/m, the same as expected, after improving by 0.1% m/m in November.

The NFP report may be called bad, but in fact, it’s not true. There were fewer business days in December because of holidays. We should add that the month itself is not very active for the labor market. The Average Hourly Earnings, which is more important for the American economy in this case, is looking excellent. In this light, we may say that there is nothing negative happening to the US Labor market in December.

There won’t be much significant statistics for the main currency pair today. The Eurozone will report on the Retail Sales and the Sentix Investor Confidence. Later in the evening, the USA will publish the Consumer Credit.

RoboForex Analytical Department