Traders and analysts alike are just as intentional on the US dollar today. They’re anxiously awaiting a big employment report that’s due later today. With all this focus, you’d expect the US dollar to be on a massive rally. Its NOK–USD price has moved markedly above the 1.20 floor. The euro is experiencing light pressure for a fifth-straight day. It’s now approaching that golden 1.15 level.
As markets get ready for another strong US microeconomic data indicating a continuation of new jobs we create each new month, uncertainty lingers. Next month’s job numbers will be a “game changer,” they said in terms of market sentiment and possible investment plans. The brief recent partial shutdown of the US government has hampered the ongoing collection of statistical data. This picture has been further complicated by a confluence of factors.
The performance of the US dollar is heavily influenced by ongoing speculation regarding a potential Federal Reserve (Fed) rate cut. As things stand, market participants are about evenly split on whether or not we’ll see a cut. With the date of the Fed meeting coming ever closer, this adds potentially dangerous space for speculation. Analysts warn that any clear moves, up or down, could set the tone for both currencies for months to come.
In the past few weeks, the euro has experienced an unusually small volatility range. The euro is still trading under key levels. Traders, still active speculators, are aggressively looking for opportunities to sell it back if it tumbles down significantly under the 1.1450 level. This double move underscores the wary mood that has taken hold in the markets as both currencies find their way through rocky economic seas.
This afternoon, the United States is going to be digesting a new set of jobs data. This corrective update might offer a more truthful glimpse into the prospects for both the dollar and euro going forward. The markets continue to be watchful. They are undoubtedly ready to react should anything become a serious threat to change the calculus between these two behemoth currencies.