Published on 02.06.2022 16:08

The Euro tumbled back below the $1.07 mark in yesterday’s trading session after a disappointing consumer confidence number from the Eurozone and a strong round of manufacturing data from the US kept alive expectations of aggressive rate hikes from the US Federal reserve over the next few months.

The latest retail sales figures from Germany, Europe’s financial powerhouse hit the market at -5.4 percent against analysts’ expectations for a figure of -2.85 and shows that the German economy is still well short of a full economic recovery and also may be attributed to the high energy prices

On the other hand, data from the US was more positive with the release of the ISM manufacturing figures which came in at 56.1 against expectations for a figure of 54.5 and anything above 50 shows the sector is in expansion mode.

This is just another but of positive economic data that adds to the case for a 50 basis point rate hike next month from the US Federal Reserve and the disappointing figures out of Germany may give the European central bank something to think about before they pull the trigger on rising interest rates.

In today’s trading session, the focus and the main drivers of the EUR/USD currency pair will be the release of the ADP employment change numbers and the initial jobs claims figures from the US which will be closely monitored by the Fed as one of the conditions for them to hike rates is a robust employment market.

Today’s job news is usually a good indication of what we can expect tomorrow with the release of the nonfarm payrolls figures which is shaping up to be the most important news of the week and a disappointing performance may bring the US dollar’s recent rally to an end.


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