- EUR / USD is still on track to close the second day in a row lower.
- The US Dollar Index remains in positive territory above 91.30.
- The ISM Services PMI in April disappointed analyst estimates.
The pair EUR/USD it fell to its lowest level in more than two weeks at 1.1986 in the early trading hours of the European session. Although the pair rebounded and turned positive on the day, it lost its traction and was last seen shedding 0.17% on the day at 1.1993.
The USD market valuation continues to drive EUR / USD movements in the absence of major fundamental drivers that could affect the performance of the shared currency against its rivals. The only euro zone data showed Markit’s services PMI rose to 50.5 in April. This reading largely coincided with market expectations and failed to trigger a market reaction.
In the second half of the day, the Automatic Data Processing Research Institute (ADP) announced that employment in the US private sector increased by 742,000 in April, compared with analysts’ estimate of 800,000. Additionally, ISM’s Services PMI fell to 62.7 from 63.7 in March. Following the release of this data, the US dollar index advanced above 91.30 and forced the EUR / USD to push lower.
However, ahead of Friday’s critical non-farm payroll (NFP) report, fluctuations in major currency pairs remain relatively limited.
On Thursday, euro area retail sales data and the weekly report on initial jobless claims from the US Department of Labor will be analyzed for fresh momentum.
EUR / USD outlook
Nordea analysts think the EUR / USD is likely to extend its decline and the US will continue to outperform other major economies in growth rates.
“We believe that we are likely to end 2021 at clearly lower levels in EUR / USD compared to the current spot, as USD interest rates are simply more alive than EUR items, especially since the ECB apparently wants to continue. printing more on the economy rebound during the spring and early summer, “analysts said. “The bond market also reflects relative growth prospects, which simply look more optimistic in the US compared to Europe, not least due to a more successful vaccine rollout. Our target is 1.15-1.16 in EUR USD. “
Additional levels
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