EUR/USD has ticked lower in the Wednesday session. Currently, the pair is trading at 1.0550. On the release front, German Industrial Production rebounded with a strong gain of 2.8%. Later in the day, the US releases ADP Nonfarm Employment Change, ahead of the official Nonfarm Payrolls report on Friday. On Thursday, the ECB will set the benchmark rate, while the US releases unemployment claims.
After some solid data last week, German numbers are mixed this week. Industrial Production gained 2.8%, its strongest gain since January 2016. Factory Orders plunged 7.4% in February, much worse than expected. Retail sales, the primary gauge of consumer spending, declined 0.8%, compared to an estimate of 0.2%. This marked a fifth decline of six releases, as the German consumer continues to hold tight to her purse strings. If data from Germany, the Eurozone’s largest economy, continues to point downwards, investors could get edgy and drag the euro south towards the 1.05 level.
Donald Trump and his new administration continues to create controversy on an almost basis, much to the consternation of the markets. Still, the dollar hasn’t skipped a beat and remains at high levels against its major rivals, including the euro. The dollar has benefited from a strong economy and the increasing likelihood of a rate hike at the upcoming Fed policy meeting on March 15. The likelihood of a March hike has jumped to 84%, according to the CME group, compared to 33% just a week ago. The US will kick off a host of employment indicators this week, starting with the ADP Nonfarm Payrolls on Wednesday. These job numbers will be critically important, as strong numbers will likely boost the odds of a March move as well as push the greenback to higher levels.
