The “greenback” remains calm. Overview for 02.12.2021

EURUSD is rather calm on Thursday; the pair is waiting for the news. 

The major currency pair reached stability while waiting for the news. The current quote for the instrument is 1.1326.

The statistics from ADP published yesterday showed that the Non-Farm Employment Change was 534K in November after being 570K (revised) in the previous month and against the expected reading of 525K. 

There is no direct correlation between reports from ADP and NFP, but the former still provides a general impression of what is going on in the labour market. 

Yesterday, the US Fed Chairman Jerome Powell and the Secretary of the Treasury Janet Yellen continued speaking in front of the Senate. Among other things, they were talking about an earlier reduction of the QE programme. According to Powell, it shouldn’t have a negative influence on capital markets and the regulator is not expecting any stresses from this. He said that the Fed would continue its accommodative policy even after the QE closure. The regulator is planning to start detailed discussions of the programme closure as early as the next week.

As for inflation, the second main topic right now, the Fed is expecting it to significantly drop in the second half of 2022. At the same time, the regulator is not 100% sure that it would happen and tends to doubt forecasts. The Fed is going to implement all fiscal tools to have the opportunity to handle any consequences of high inflation. 

The regulator’s “hawkish” tone is still quite unusual, but it may seem to be a new reality.