The U.S. Labor Department released the long-awaited labour market data today. The data was mixed. The U.S. economy added 173,000 jobs in August, missing expectations for a rise of 220,000 jobs, after a gain of 245,000 jobs in July. The U.S. unemployment rate dropped to 5.1% in August from 5.3% in July, exceeding expectations for a decline to 5.2%.
It is unclear if this data convince Fed officials to raise the interest rate this month. Officials' opinions remained varied.
I think it is likely that the Fed will not raise its interest rate this month just to wait and first to analyse which impact the recent market turbulences had on the U.S. economy.
The U.S. economic outlook also remains dependent on oil prices as U.S. oil companies made a significant contribution to the U.S. economy.
Market participants were cautious this week as it is unclear what will happen in China. Chinese markets were closed for a public holiday on Thursday and Friday.
Greece should turn again in focus as the snap election is approaching. The election will be held on September 20. The majority supporting Alexis Tsipras' Syriza party dwindles. It will need time to form a government. The implementation of the bailout obligations is likely to suffer.
Yesterday's comments by the European Central Bank (ECB) President Mario Draghi put the euro under pressure. He said that the central bank could extend its asset buying programme if needed, adding that the limit on sovereign bond ownership by the central bank will be raised to 33% from 25%. The ECB lowered its economic growth and inflation forecasts. Draghi pointed out that the central bank did not decide on the further stimulus measures yet.
The possible further monetary policy easing could have a negative impact on the euro if additionally the economic data from the Eurozone will not met expectations of market participants.
It is likely that the currency pair EURUSD will test the level at $1.1200, maybe even the level of $1.1300, if the U.S. economic data will be negative and existence of positive news from the Eurozone.
If the U.S. economic will be better than expected or if there will be negative news from Greece or from the Eurozone, the currency pair EURUSD may test the level of $1.1000 or $1.0900.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2021 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.