A bit of volatility in EURUSD during yesterday’s ECB press conference saw the rate recover to back above 1.1100 as Mario Draghi announced upgrades to growth forecasts for the Eurozone, but the gains were swiftly reversed as we now sit just above 1.1000. Although there was the odd brief visit below 1.1000 the fact that the euro didn’t fall out of bed shows that parity to the dollar, if it comes at all, may not be for a while. The short euro trade remains a very crowded one and so a snap back towards 1.1100 and beyond is possible, especially since ahead of the ECB meeting yesterday economic data had been showing signs that the worst looks to be over for the Eurozone. Next Monday’s commencement of QE comes at a time when the Eurozone is already turning a corner, so it is little wonder growth forecasts were upgraded and the euro is seeing a degree of support.
Today’s focus will shift to the US as we get the release of this month’s nonfarm payroll, expected to come in at 240k slightly down from last month and at the same time unemployment is due to decline from 5.7% to 5.6%. Again a key figure to watch is the average earnings which month on month is due to rise 0.2%. This data is likely to confirm whether the dollar continues to push on to fresh eleven year highs having just on Wednesday broken out beyond the recent highs that had kept its gains capped throughout February.