As the dollar weakens, the EURUSD anticipates further expansion. The currency pair is aiming to expand beyond the 1.0600 pivot level. As buying pressure keeps expanding, a major focus is still given to the US ISM non-manufacturing sector. The euro on its own is not getting much stronger at the moment, but the greenback appears to be declining. This, in turn, is giving a boost to the EURUSD market. The Greenback’s southward turn could be traced to recent and upcoming decisions by the Fed. The US labor market is quite solid. Based on the November report, the unemployment rate appears to remain unchanged.
Wages and Unemployment Weigh on the US Index
The unemployment rate stalled at 3.7%, and the NFP (non-farm payroll) increased to 263,000 from the two hundred thousand forecasts. In contrast to October, which recorded a 4.6% increase, the average hourly wage increased by 5.1%. These figures have made the employment and labor markets quite stable. Wage growth is a source of concern for US interest rates, and with all of these factors at play, the USD could become unstable.
On a 10-year horizon, the German financial market appears flat, close to 1.85%. According to the report, the PMI fell to 48.5% in November from 46.2% in October.
Based on the ISM session, it is said to take center stage, followed by factory orders and PMI. As long as Fed policies are the driving force behind the greenback, the euro will continue to align with it.
The euro is more likely to hold up well as it is being supported by the greenback’s dips. Market participants are keeping an eye on the Fed’s rate cycle in comparison to the eurozone’s. For both the short and long trends, the bulls are supporting the price motion. The currency pair has established itself beyond the 1.0550 key zone, and Scotiabank expects the currency pair to gain more moments.
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