Traders are not in a hurry to close short positions on the USD, as strong labor market data cannot be the leading cause for the increase in rate in September, especially before the first debate between presidential candidates Hillary Clinton and Donald Trump, which is scheduled for September 26.
According to the data released last Friday, the number of jobs outside agriculture sector in the USA has grown by 255 000 in July against the forecast of +180 000). The Revised index for June has grown from up 287000 to 292000 in May – from 11000 to 24000. Unemployment rate remained unchanged (4.9% versus the forecast of 4.8% and 4.9% in June). Positive labor market data has raised chances of the key interest rate increase in September. However, probability monetary policy tightening in September is now 18% against 9% prior to the publication of NFPR). At the same time, there are no many reasons for the rise in the Euro either.
Largest economies in the Eurozone remain weak. German economy, the leading economy of Eurozone is deteriorating. The ECB may launch more monetary policy easing in Eurozone.
This week, traders’ attention will be focused on the data on German and European GDP, which will be known on Friday (09:00 and 11:00 GMT+3 respectively). This data, along with the inflation, are the main factors affecting monetary policy of the ECB.
Today’s news will include monthly report on the US budget with economic overview by the US Fed for July (Beige Book). The report will be released at 21:00 (GMT+3).
Today, at 24:00 the interest rate decision by the RBNZ will become known. It is expected that the rate will be lowered by 25 basis points, to the level of 2.00%. Volatility in the market is likely to increase at this time period, especially in pairs with New Zealand dollar.