Before the release of important US labor market data the USD is traded in the narrow range. In the past few days the USD has grown significantly amid expectation of the tax cuts in the USA and acceleration of economic growth after the election of a new president.

Trading volume has also dropped before the release of the Nonfarrm PayRolls. It is expected that the number of jobs outside agricultural sector has grown to 175 000, which is by 14 000 more than in October. Unemployment rate in the USA is likely to remain at the previous level of 4.9%.

Market participants are waiting for the labor data as it will be the latest statistics before the Fed’s meeting on 13-14 December and can have influence on the interest rate decision and overall monetary policy of the bank. In case of the positive data chances of the rate hike will increase.

According to the futures for the Fed rates, probability of the monetary policy tightening is 96% - 98%.

Minutes of the meeting of FOMC, released earlier, showed that the rate hike may take place at the next meeting, which is 13-14 December.

Market has incorporated probability of the rate hike in prices. Now market participants want to know if the Fed is going to raise rates next year. And US macro-statistics including labor data is an important factor affecting this decision.

Meanwhile, the ECB continues QE program in Eurozone, buying European assets for the amount of 80 billion euro (88 billion USD) every month. However, the Bank has not achieved the desired results yet (improvement of macro-economic data and the increase in inflation). Currently, inflation rate in Eurozone is slightly below the target level of 2%. Economists believe that the European central Bank will continue QE program for at least 6 months.

Some of the economists think that the Bank may announce changes to the program, which is due to complete in March 2017, at the meeting on 8 December.

Uncertainty about future of the EU and Eurozone put pressure on the Euro. On Sunday a referendum in Italy will be held on amendments to Constitution and election in Austria. Due to the forthcoming events on Sunday many market participants prefer the USD, Yen and Franc. Many broker informed their clients that leverage for many currency pair will be decreased today.EUR/USD: USD is traded in the narrow range before the release of NFPR. Fundamental analysis for 02/12/2016




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