On Wednesday, June 30, trading in the euro ended in decline. The euro depreciated against the US dollar by 0.33%, to 1.1856. The US dollar warmed up as the end of the second quarter approached. It began to strengthen due to investors’ withdrawal from risk amid the rapid spread of two types of coronavirus, Delta and Lambda, and then growth accelerated due to technical factors.
On Friday, the US will release a report with data on the number of jobs in the US nonfarm sector in June. Yesterday’s ADP employment data for June was better than expected. In this regard, investors expect a strong NFP report, although there is no correlation between the two.
It is believed that, using the news about the introduction of new restrictions, the market is warmed up before the NFP report, so that dollar speculators occupy high levels. If the report disappoints the market, the dollar will have a lot to return to until the next payroll.
The inflationary report also put pressure on the euro. The data showed a slight decline in inflation in the eurozone in June. According to preliminary estimates from Eurostat, the consumer price index rose 1.9% year-on-year in June, after rising 2.0% in May. The European Central Bank forecasts inflation below, but close to 2.0%.
Scheduled statistics (GMT + 3)
- Manufacturing PMIs for June in France, Germany, the Eurozone and Britain are due from 10:55 to 11:30.
- Bank of England Governor Andrew Bailey will deliver a speech at 11:00.
- At 12:00 in the eurozone there will be a report with data on the labor market for May.
- At 15:30 the US will announce a change in the number of initial applications for unemployment benefits.
- At 16:45, the US is to publish the May Manufacturing PMI.
- At 17:00, the US is to release the June ISM Manufacturing Index and the May construction spending change.
- The OPEC-JMMC meeting will take place on Thursday. OPEC meeting at 14:00, monitoring committee meeting at 16:30, OPEC + meeting at 18:00.
At the auctions in Asia, the main currencies moved into negative territory. The greatest losses are incurred by the “Australian” (-0.26%). The euro renewed its monthly low at 1.1837.
In June, the euro lost 3.01% against the dollar, and rose 1.08% in the second quarter, leaving a long upper shadow of 3.46%. At the end of the month, the situation deteriorated markedly. The dollar rallies with gold amid falling yields on US bonds.
Major currencies are falling, gold is getting more expensive. The main reason for the growth of XAUUSD is the positive US statistics. ADP and pending sales rose. The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, as well as due to an increase in the number of proposals.
Major currencies may catch up with gold, or gold will collapse to $ 1,757 against $ 1,778 in Asia. At the daily timeframe for the euro, sellers are set to move lower to 1.1775 (trend line). Due to the coronavirus and uncertainty about the future steps of the US Federal Reserve, it is not possible to capture investor sentiment. There are also enough purchases, but on negative news, buyers are taken out of the market.
On Thursday, the EU is to release PMI data. The head of the Bank of England Andrew Bailey can say something interesting. The states will present weekly unemployment statistics and the ISM index in the manufacturing sector. Today the market will again be susceptible to news and it is not known whether the euro will recover on it or not.
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