- EUR/USD falls 0.33% after registering the greatest daily loss since December 2024 on Monday.
- Employment offers in the US fail for 200k; Consumer confidence increases, but concerns about the labor market persist.
- Operators expect the Fed decision, EU inflation, employment and growth data to guide the next movement.
The EUR/USD resumed its bearish trend for the second consecutive day while market participants digest softer economic data than the expected of the United States (USA). This and the commercial agreement between the European Union (EU) and the US promoted the dollar and weighed on the euro, which registered a loss of more than 1.30% on Monday, the largest since December 2024. The torque is around 1,1550, with a fall of 0.33% daily.
The feeling became slightly negative for commercial news, since the commercial conversations between the US and China have not finished, although both countries agreed to extend the commercial truce, which needs to be authorized by President Trump, revealed the secretary of the US Treasury, Scott Besent.
In the Data Front, the June Employment and Rotation Opening report (Jolts) showed that the labor market is cooling, since vacancies failed for more than 200K, according to the US Labor Statistics Office (BLS). Consumer confidence for July improved, although the survey showed that people are struggling to find employment.
On the other side of the Atlantic, the lack of economic data keeps the euro low yield, after the commercial agreement between the US and the EU. Operators expect the publication of retail sales data for Germany, growth figures for Spain, Italy, Germany and the EU. In addition, the operators expect the publication of the HCOB manufacturing PMIs for Spain, Italy, Germany and the block, employment data and inflation figures in Germany and the EU.
Meanwhile, the operators approach is in the next Federal Reserve Policy publication, which will conclude on Wednesday. The Central Bank is expected to maintain interest rates without changes, although the attention will be in possible dissidents, especially in the light of the recent comments of the governors of the Fed, Christopher Waller and Michelle Bowman, in favor of a cut of rates of 25 basic points.
Daily summary of market movements: the dollar ignores the weak employment data and pushes the euro downward
- The June Jolts report showed that job offers fell to 7,437 million, from 7,769 million in May and below the 7.5 million consensus, according to the BLS. The fall underlines the growing business caution in hiring, promoted by uncertainty around future tariff policies.
- The data were published before the Federal Reserve Policy and the Non -Agricultural Payroll Report on Friday, which is expected to show a moderation in hiring, with forecasts that point to 102K new jobs, below the 147K of June.
- The Board Conference reported that consumer’s confidence improved in July, with the index by increasing 97.2 from 93.0 in June, exceeding market expectations of 95.0.
- The dollar prolonged its profits, as indicated by the US dollar index (DXY), which tracks the yield of the dollar against six currencies, which rose 0.24% to 98.89.
- This week more US economic data is expected the publication of the inflation indicator preferred by the FED, the Personal Consumption Expenditure Price Index (PCE) for June, together with employment and growth data, and the ISM manufacturing PMI, is expected to provide information about the current state of the economy.
- The Consumer Expectations Survey of the European Central Bank (ECB) for June showed that households expect an inflation of 2.6%, below 2.8% for 1 year, in 2.8% without changes for 3 years, and 2.1% as the number of May for a period of 5 years.
- As for the monetary policy of the ECB, Deutsche Bank does not expect more cuts and suggests that the next movement would be an increase in the late 2026.
- The president of the USA, Trump, said that the US will impose a tariff on the rest of the world, and that is what they will have to pay, while he would love to see China open their country. In addition, Trump said the world tariff would be between 15% and 20%.
Technical Perspective: The Bassist Trend of the EUR/USD remains, falls below 1,1600
The EUR/USD fell below the single mobile average (SMA) of 1,1574, after overcoming the 20 -day SMA of 1,1678 and the figure of 1,1600, on Monday. The Relative Force Index (RSI) became bassist, suggesting that a greater decrease in torque is expected.
If the EUR/USD falls below the 50 -day SMA of 1,1550, the operators would point to 1,1500. If it is exceeded, the next stop would be 1,1400. On the contrary, if the torque rises above 1,1600, the 20 -day SMA would be available in 1,1678.
EURO – FREQUENT QUESTIONS
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
