EUR/USD edges up amid US data blackout and cautious markets
- The Euro edges up to 1.1740 but remains trapped within previous ranges.
- The US Dollar has found some support despite the weak employment data and rising bets of Fed rate cuts.
- Investors to focus on the Eurozone's Unemployment Rate and US Challenger Job Cuts data.
EUR/USD is trading with moderate gains, right above 1.1750 at the time of writing on Thursday, but still trapped within a tight range below 1.1760 for the third consecutive day. The US Dollar remains on the defensive amid rising bets of back-to-back Federal Reserve (Fed ) interest rate cuts, though risk appetite remains subdued, which keeps Euro (EUR) upside attempts limited.
US economic data released on Thursday was mixed. The ADP Employment Change showed an unexpected decline in September, adding pressure on the Fed to lower interest rates further over the upcoming months. Manufacturing activity, on the other hand, improved slightly above expectations, yet with new orders and employment steady at low levels, revealing the negative impact of tariffs.
With the US government closed amid a budget standoff, the Labor Department will not release the US jobless payrolls report, and, most likely, neither Friday's key Nonfarm Payrolls. In Europe, August's Unemployment Rate is the only event worth mentioning, while in the US, the Challenger Job Cuts could gather particular interest.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.03% | 0.01% | 0.03% | -0.11% | -0.48% | -0.09% | |
| EUR | 0.12% | 0.08% | 0.12% | 0.13% | 0.00% | -0.25% | 0.00% | |
| GBP | 0.03% | -0.08% | 0.06% | 0.03% | -0.05% | -0.32% | -0.05% | |
| JPY | -0.01% | -0.12% | -0.06% | 0.00% | -0.13% | -0.59% | -0.07% | |
| CAD | -0.03% | -0.13% | -0.03% | -0.00% | -0.15% | -0.36% | -0.11% | |
| AUD | 0.11% | 0.00% | 0.05% | 0.13% | 0.15% | -0.31% | 0.05% | |
| NZD | 0.48% | 0.25% | 0.32% | 0.59% | 0.36% | 0.31% | 0.42% | |
| CHF | 0.09% | -0.01% | 0.05% | 0.07% | 0.11% | -0.05% | -0.42% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: FX markets remain rangebound in the absence of US data
- The Euro Dollar remains trading within a 50-pip range above 1.1710. Recent Eurozone data have not been particularly supportive, and the US Dollar remains steady despite the downbeat employment figures and rising bets of Fed rate cuts. Investors seem to be wary of taking excessive risks, awaiting developments from the US regarding the government shutdown.
- On Wednesday, the US Supreme Court dismissed US President Donald Trump's order to fire Federal Reserve Governor Lisa Cook and allowed her to remain in her position at least until January, when the court is expected to hear Trump's arguments. This sentence backs the Fed's independence and represents a significant setback to the president's attempts to control the central bank.
- US economic data, however, continues to point to further monetary easing. Wednesday's ADP employment report revealed a net loss of 32K jobs in September, against expectations of a 50K increase. Beyond that, August reading was revised to a 3K decline from the 54K rise previously estimated, adding to evidence that the US labor market is deteriorating sharply.
- September's US ISM Manufacturing Purchasing Managers Index showed that business activity improved to 49.1 from 48.7 in August. The final data beat estimates of a 49.0 reading, but new orders declined to 48.9 from 51.4, and employment contracted at a 45.3 level, easing the optimism about the headline reading.
- Recent data and the US government shutdown have prompted traders to increase their bets on immediate Fed rate cuts. Chances of a quarter-point easing in October are practically fully priced, with a 99% chance according to the CME Group's FedWatch tool, while the odds for another such cut in December have increased to 86%, from 60% one week ago.
- In Europe, September's preliminary Harmonized Index of Consumer Prices (HICP) confirmed expectations of an acceleration to a 2.2% year-on-year rate, from 2% in August, while the core reading continued to grow at a steady 2.3% yearly rate.
Technical Analysis: EUR/USD resistances at 1.1760 and 1.1795 keep holding bulls
EUR/USD immediate bias remains bullish, but technical indicators point to a weakening momentum, as bulls remain capped below the broken trendline. The 4-hour chart Relative Strength Index (RSI) at 55 is close to the 50 neutral level, and the Moving Average Convergence Divergence (MACD) is crossing below the signal line.
Bulls were rejected at the 1.1780 area on Wednesday, a few pips below the mentioned reverse trendline, now around 1.1795. A successful break of that level is needed to cancel the broader bearish trend from mid-September highs and shift the focus towards the September 23 and 24 highs, near 1.1820.
To the downside, immediate support is at the 1.1710-1.1715 area, which contained bears on Tuesday and Wednesday. Further down, last week's lows at the 1.1645-1.1655 area and the September 2 and 3 lows, near 1.1610, would come into focus.
Euro FAQs
The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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