- EUR/USD wants to cross parity amid less consensus on US jobs data.
- The ECB’s Lagarde has not provided a true picture of the inflation situation.
The EUR/USD pair is hovering around the psychological resistance at 1.0000 following a perpendicular recovery after breaking above the 0.9732-0.9850 consolidation. The pair is preparing to break down the parity as the dollar index (DXY) is witnessing an intense sell-off by market participants. DXY is expected to show a bearish move after giving up crucial support at 110.00.
DXY’s appeal has weakened ahead of the US jobs data. The extremely aggressive campaign of the Federal Reserve (Fed) to achieve price stability has translated into weaker projections for the US Non-Farm Payrolls (NFP) data. The corporate has postponed the expansion plans of the ability and new investment opportunities to avoid higher interest obligations. This has slowed down the hiring process and therefore employment opportunities.
According to estimates, the US economy added 250,000 new jobs to the labor market in August, well below the previous release of 315,000. A lower-than-expected reading would further weaken DXY as the Fed will be forced to cut back on its hawkish tone to safeguard the economy from recession.
On the Eurozone front, comments from Christine Lagardeof the European Central Bank (ECB), on Tuesday, clarified that the interest rate inflation remains in uncharted territory. Lagarde cited that it was difficult to say whether or not inflation has peaked in the euro zone, Reuters reported. Furthermore, he added that “the least we have to do is stop stimulating demand.”
Source: Fx Street
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