Forex Marketz Daily Forex News – Fully Markets Update
EUR/USD (1.0765)
Talking points to consider in this Forex market:
- The EUR/USD took a major pounding after a robust NFP release on Friday.
- The recent dive has allowed for some buyers to enter this Forex market.
- The euro remains heavily sold and long-term bearish.
Last week saw some major event risks driving the US Dollar and the euro. It is not shocking that the euro showed a mixed performance. There are two major divergences with the Fed and the European Central Bank (ECB) as they move in opposite directions and the Forex markets had a lot to come to terms with last week. On one side of the coin the euro benefited from a dovish Bank of England announcement. Rising 0.02 percent to close the week at 0.7137. This Forex market did see a low of 0.7041 for the day. On the other side of the coin, the EUR/USD was beaten down after a solid NFP report. This Forex market sank a whopping 2.47 percent to close the week near 1.0734.
We have been talking how we would need to see more signs of policy divergence between the ECB and the Fed for more declines in the EUR/USD. At the time we were seeing weak to middling economic data from the US while the data from the Eurozone was improving. This condition was filled when the US released that NFP last Friday. Keep in mind, that the recent surge in the US Dollar is complex and often predicted on rapidly changing rate expectations. It would now seem there is a pretty good chance of a 25 basis point hike in December.
With the EUR/USD now back on the decline and with the EUR/GBP near yearly lows, despite the recent dovish tone out of the Bank of England, the ECB is relatively happy with recent developments on the Fore front. However, the bank remains concern with economic growth, which is stagnant and deflationary concerns which remain elevated.
