The Euro is once again trading higher against the US dollar as we enter today’s European trading session and the European currency has now racked up 5 straight days of gains and is hovering around the weekly high of 0.9850.
The catalyst for today’s strength was disappointing data out of the US with the release of the ISM Manufacturing PMI data yesterday which hit the market at 50.9 vs analysts’ expectations for a figure of 52.2 and well down from last month’s figure of 52.8. It was the lowest reading in over two years.
The US ISM New Orders Index also disappointed market participants coming in at 47.1 predictions for a figure of 49.6 and lower than last month’s number of 51.3.
The Euro will need to find some extra strength to break through the 0.9850 mark which at the moment is acting as a very stubborn resistance area. A firm break above this mark would open the gates for a recovery of the euro from the multi-year low it hit last week towards 0.9870 and then the resistance area at 0.9910.
This highlight of this week’s trading sessions will be the release of US employment data, which will hit the market on Friday. Analysts predict that the US economy has added 250k jobs in the labor market vs last month’s 315k.
If the numbers come in on consensus, this may give a further boost to the Euro as a weaker job market will show that the aggressive rate hikes from the US Federal reserve are starting to kick in- and the Central bank may revise down the number of rate hikes going forward.