On Thursday the 2nd of May, trading on the euro closed down. The US dollar made gains against most of the world’s major currencies. The greenback was boosted by comments from Fed Chair Jerome Powell regarding inflation. He said that the factors currently lowering inflation are probably temporary, and so there’s no need to lower interest rates. According to the futures market on interest rates, the probability of a rate hike this year is 47%.
The pound dropped after the BoE meeting. The central bank revised its GDP figures upwards while downgrading inflation figures. The regulator is in no hurry to raise interest rates amid unease as Brexit talks continue.
Day’s news (GMT+3):
- 11:30 UK: Markit services PMI (Apr).
- 12:00 Eurozone: CPI (Mar), PPI (Mar).
- 15:30 US: unemployment rate (Apr), nonfarm payrolls (Apr), average hourly earnings (Apr), average weekly hours (Apr), labor force participation rate (Apr).
- 16:45 US: Markit services PMI (Apr).
- 17:00 US: ISM non-manufacturing PMI (Apr).
- 20:00 US: Baker Hughes US oil rig count.
Yesterday’s expectations were met in full. The pair rose to the 22nd degree before dropping below the 67th degree. At the time of writing, the euro is trading at 1.1168 against the dollar. In the Asian session, the bears shifted yesterday’s low to 1.1167. The immediate target is 1.1159.
There’s no forecast on today’s chart because the payrolls report comes out at 15:30 (GMT+3). It’s expected that the US economy added 181k jobs last month, and that the unemployment rate will remain at 3.8%.
I don’t think that this month’s NFP report will be particularly interesting for markets following the FOMC meeting. Jerome Powell said at his press conference that the Fed isn’t planning to change interest rates either way.