- EUR/USD is almost unchanged after hitting a daily high of 0.9915.
- The US October ADP Employment Change report gives yet another reason for the Fed to continue its “aggressive” approach to monetary policy.
- The Eurozone Global Manufacturing PMI for October confirms that the bloc could enter a recession.
The pair EUR/USD is off pending the decision of the Federal Reserve Open Market Committee (FOMC), which is almost certain to give the fourth rate hike of 75 basis points by the Fed, although what traders are looking for it is the pace of new hikes, whether it will keep pace or slow, as sources linked to the Fed said in an October article. At the time of writing, the EUR/USD is trading at 0.9867, almost unchanged.
EUR/USD is range bound awaiting Fed decision
US stocks continue to trade with minimal losses after the release of US employment data, reflecting that the labor market has not yet eased. At the same time, the Fed pivot narrative would be confirmed or reversed once Jerome Powell takes the stand.
ADP reported that US companies hired more people than estimated in October. ADP’s October employment change report showed private payrolls rose by 239,000, above estimates of 185,000, and topping September’s upward revision of 192,000.
According to Nela Richardson, chief economist at ADP, the report is strong given the maturity of the economic normalization, although she noted that hiring was not extensive. She added: “Goods producers, who are sensitive to interest rates, are pulling back, and job-changers are getting lower wage gains.”
With the US economy back in expansionary territory, October’s PCE, the Fed’s favorite inflation gauge, rose, the ISM Manufacturing PMI remains in expansionary territory and employment data US inflation shows labor market tightness, that could deter the Fed from slowing the pace of tightening.
On the other hand, the Eurozone agenda published the Trade Balance of Germany, which showed a surplus of 9,000 million euros in September, compared to 0,300 million in August. Later, the S&P Global Manufacturing PMI, in its final reading, fell to 46.4, disappointing estimates of 46.6, reinforcing the case that the Eurozone could slip into recession.
Ahead of the schedule, at 18:00 GMT, the Federal Reserve will reveal its monetary policy decision, followed by Jerome Powell’s press conference at 18:30 GMT.
EUR/USD Key Technical Levels
Source: Fx Street
