EUR/USD has posted gains in the Monday session. Currently, the pair is trading at 1.1774, up 0.23% on the day. On the release front, Germany’s trade surplus widened to EUR 20.3 billion, matching the estimate. Eurozone Sentix Investor Confidence dropped to 12.1, but this beat the forecast of 9.0 points. ECB President Mario Draghi is testifying at the European Parliament Economic and Monetary Affairs Committee. On Tuesday, Germany and Eurozone ZEW Economic Sentiment are expected to post declines. The U.S will release JOLTS Jobs Openings.
U.S employment data was a mix on Friday, as job growth remained above the 200-thousand level, but wage growth faltered. Nonfarm payrolls dropped to 213 thousand, but this beat the estimate of 195 thousand. Average Hourly Earnings edged lower to 0.2%, shy of the estimate of 0.3%. There was a surprise as the unemployment rate climbed to 4.0%, above the forecast of 3.8%. The data demonstrates that the U.S labor market remains strong, and the economy continues to perform well. The markets remain bullish on U.S growth, despite uncertainty in Europe and elsewhere, as well as the growing threat of an all-out trade war between the U.S and China.
EUR/USD showed little response to the FOMC minutes, which were released on Thursday. The minutes were somewhat dovish in tone, as policymakers gave a thumbs-up to the strong U.S economy, but expressed concern about developments abroad. These include growing trade tensions with U.S trading partners, as well as political and economic developments in Europe. The minutes also reiterated the Fed’s support for a “gradual” raise in interest rates. The markets are circling the September policy meeting for the next rate hike, with the CME Group setting the odds of a quarter-point hike at 80%.
