The EUR retreated without a fight. Overview for 09.03.2023

The EURUSD got under pressure. The current quote is 1.0550.

The reason was the comments made by Jerome Powell, the chairman of the US Federal Reserve System. Speaking before the Senate on Tuesday, he seemed to open the door for more noticeable increases in the interest rate at upcoming meetings. They are now discussing a lift of the interest rate by 50 base points instead of the previous scenario implying an increase by 25 base points at a time. The idea was immediately picked up by investment companies: BlackRock published a release predicting the interest rate of 6%.

Naturally, this left the euro no chances.

Statistics from Europe was not impressive either. The regional GDP in Q4 changed by 0%, while the prelim calculation implied a change by 0.1%.

Certain signals are also alerting. Retail sales in Germany in January dropped by 0.3% m/m after a decrease by 1.7% m/m previously, though a recovery had been expected here. Industrial production in the same country grew by 3.5% m/m, exceeding the forecasts two times. The German economy is in trouble because of supply chain issues, high inflation levels and quite patchy domestic demand.

The US started publishing the employment market data for February. The first one to come out was the ADP private sector employment report. The indicator grew by 242 thousand instead of the 197 thousand forecast and the previous growth by 119 thousand. Then the market will focus on Friday releases about the unemployment rate and the NFP.