EUR/USD has posted gains in the Thursday session. Currently, the pair is trading at 1.1687, up 0.27% on the day. On the release front, German Factory Orders jumped 2.6%, crushing the estimate of 1.1%. Eurozone Retail PMI ticked higher to 51.8 points. In the U.S, ADP nonfarm payrolls is expected to rise to 190 thousand, while unemployment claims are forecast to edge lower to 225 thousand. The Federal Reserve will release the minutes of the June policy meeting. On Friday, the U. S releases official nonfarm payrolls and wage growth.
Investors are keeping an eye on the FOMC minutes from the June meeting, which will be published on Thursday. The minutes could be a market-mover, as the Federal Reserve raised rates at the meeting for the second time this year. How many more hikes will we see in 2018? Policymakers appear split between three and four moves, as the U.S economy is booming, but the threat from escalating trade tensions has the Fed concerned. Investors will be looking for clues from the minutes as to Fed monetary policy in the second half of 2018. If the minutes are hawkish, the dollar could see some gains during the North American session.
The escalating trade war between the U.S and the EU has raised concerns that the eurozone export sector could hit some significant headwinds. President Trump has threatened to impose tariffs of 20 percent on European car imports if the EU does not remove their tariffs on U.S. automobiles. The EU would clearly prefer not to engage in a full-blown tariff war with the United States. European officials are examining the possibility of a tariff-cutting agreement between the world’s largest car exporters. In essence, this would allow the EU and the U.S to reach a deal on automobile tariffs without going through the World Trade Organization.
Early in the week, German manufacturing PMIs pointed to expansion, but also continued a troubling downward trend, falling for a sixth straight month. This trend has raised concerns about the strength of the manufacturing sector. Still, there was good news on Thursday, as Factory Orders sparkled, with a gain of 2.6%. This strong reading comes after two straight declines.
