Published on 08.10.2021 10:06

The Euro continues to drift lower against the US dollar as we enter today’s European trading session on the back of disappointing data from the Eurozone and the release of better than expected jobs figures from the US which sets the stage today for the all important non-farm payrolls report from the US.

Economic news out of Germany yesterday, Europe’s biggest economy showed Industrial Production falling by -4% on a monthly basis in August against analysts’ expectations for a figure of 0.4% which paints a picture of the German economy still struggling with the effects of the coronavirus.

From the other side of the Atlantic, the US Department of Labor reported on Thursday that 326,000 people registered for initial jobless claims in the week ending October 2 which was slightly better than predictions for a number 350,000. 

This is important news as a strong jobless claims number and is usually followed by a strong NFP figure which is due for release later today and consensus remains strong with the market an increase of 488,000 new positions following on from last month’s disappointing number of 235,000 and points to a strong rebound.

The NFP release is also seen my many investors as the last news to dictate when the US Federal Reserve will begin cutting back on their stimulus plan before the end of the year and begin plans to lift interest rates which have been at record lows for some time.

As mentioned earlier, it is all about the NFP release today for the EUR/USD currency pair and it remains to be seen just how much of the expected strong figure is already priced into the greenback.

We may see the Euro drift down towards a new yearly low of $1.1527 before the release of the news but there is a strong chance of a relief rally for the Euro if analysts are incorrect about their predictions and especially if we see a similar figure to last month.