Single Currency Pulled Back, Nonfarm Payrolls Eyed
The single currency has mildly weakened. Euro/Dollar pair lowered 0.21% to trade at 1.2478. Eurozone Purchasing Price Index reduced to 0.2%. The most important data today is US NFP release, wage growth, jobless rate and UoM Consumer Sentiment. Eurozone inflation remains at low levels, which favors the extension of ECB asset purchase program. The program is prolonged to September and Mario Draghi assured that rate hike will only be executed after it’s over, despite continuing speculations about policy tightening. The President added that it might be increased or extended even further. Benoit Coeure (executive board member) has recently expressed his support of Mario Draghi’s view.
The greenback has been slightly buoyed by Fed meeting and the following statement. As expected, the rate was maintained at 1.25-1.5%. The statement marked positive outlook of the employment growth, household spending and business fixed investment. Moreover, members saw some improvement in inflation. March rate hike is now priced in 80% odds (up from previous 74%). Some analysts even price in 90% chance. The meeting also marked the last appearance of Janet Yellen as the Fed Chair, as starting from now, the position is taken over by Jerome Powell.