EUR/USD held its bullish trend above 1.1440 in early European trade, lifted by a weaker US dollar after a soft jobs report and by upwardly revised Eurozone services data. Traders now turn to German and French figures for the next read on the bloc’s economy.
The euro held above 1.1440 against the dollar during the early European session, extending a bullish run built on two forces: a dollar that lost traction after Thursday’s disappointing US Nonfarm Payrolls report, and previously released stronger Eurozone services data.
Weak US jobs data pins the dollar
The US Dollar Index extended its decline through the European session and showed no sign of steadying. The US Dollar Index traded near 100.84, on course to end the week with a 0.50% loss. The slide traces back to the June payrolls print, in which the US economy added just 57,000 jobs, far short of the 110,000 the market expected.
That miss lifted expectations that the Federal Reserve will leave interest rates unchanged. Markets now see less than a 20% chance of a rate hike in July, a shift that adds further pressure on the currency. Ahead lie the final S&P Global and ISM Services PMIs on Monday, the trade balance on Tuesday, and the FOMC minutes on Wednesday — the first set under Chair Kevin Warsh.
Revised PMIs lift the euro
The Eurozone side of the pair drew support from data that came in better than first estimated. The June final HCOB Services PMI was revised up to 49.4 from 48.9, pushing the Composite PMI to 50 from a preliminary 49.5. German and Spanish services activity read stronger than previously thought, while Italian and French figures were revised lower.
The firmer PMI numbers improved confidence in the European economy and raised demand for the shared currency. Attention now moves to Germany’s Factory Orders on Monday at 06:00 GMT, where markets expect a 1.2% monthly gain after a 3.8% decline.
Source: FXLeaders
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