Euro Fundamental Forecast: BullishDeltafx Admin 12 January 2023
Different things happened to the euro last week. At one point, EUR/USD fell by as much as 2%. If this downward trend continues, we can say that it will be the worst week for this important currency since mid-September. However, on Friday, the euro recovered against the US dollar and reduced the loss from 2% this week to about 0.5%. It also reached a 6-week high, which is the biggest increase since July 2020.
At the end of last week, two important economic data were released in the United States. The first was the nonfarm payrolls report for December. It was expected that 203,000 jobs were created, but the actual number was 223,000. At the same time, however, the markets focused more on the decline in average hourly earnings. This was 4.6% per year compared to the published 5.0%.
A few hours later, the ISM Purchasing Managers’ Index for the service sector was released, indicating a problem for the economy. This index, which had been expected to come in at 55.0 units, was released with a drop to 49.6 units. The publication of a figure below 50 indicates an increasing contraction of economic activity and vice versa. The index fell 12.2 percent to 49.6, the worst performance since the global pandemic began in 2020.