EU Morning Report

Dollar is steady ahead of the Non-Farm Payrolls report

  • The euro rallied against the dollar a day after the European Central Bank interest rate meeting. Although interest rates were kept unchanged, the ECB President Jean Claude Trichet satisfied the markets with his hawkish stance on inflation. He emphasized on the upside risk to the price stability and he used the phrase strong vigilance, which is perceived by investors as a sign that interest rates will rise soon. Against the dollar, the euro rose to a four month high at 1.3974 and towards the 1.40 level and the pair was last traded at 1.3956.
  • The US dollar appears steady versus a basket of currencies today as February's Non Farm Payrolls report is keeping many traders on the sidelines. Non-Farm Payrolls (NFP) data will be released today at 13:30 GMT and investors expect a rise of 185K. A higher than expected NFP figure may boost the dollar indicating that the US economy has entered a strong recovery phase. But, a disappointing figure may add further weight on the greenback creating concerns about the country's labor sector. Against the Japanese Yen, the dollar rallied yesterday rising to 82.50 from 81.71 and the pair was last traded at 82.36. The dollar also traded higher against the Swiss Franc rising as high as 0.9328 from 0.9232 and the pair was last traded at 0.9317.
  • The Australian dollar slid against the greenback yesterday falling as low as 1.0113 from 1.0188.. Against the Kiwi, the Aussie extends its gains rising to 1.3733 from 1.3600 traded yesterday on expectations that interest rates in New Zealand will fall.
  • Oil prices remain at high levels as the unrest in the Arab countries resumes.  Oil edged as high as 102.45 dollars a barrel today from 100.13 traded yesterday. Gold plummeted on Thursday falling as low as 1410.03 from 1436.24. 

Currency to watch out for: EURUSD & USDJPY

  • § The EURUSD pivot point is at 1.3885 with a preference to enter into Long positions at 1.3895
  • § The USDJPY pivot point is at 82.05 with a preference to enter Long positions at 82.10              

Today's calendar and market movers:

  • § US Non-Farm Payrolls in February is forecasted to rise to 183K
  • § US Unemployment Rate in February is forecasted to rise to 9.1%
  • § US Factory Orders in January is forecasted to gain 2.2% 

Equity Markets:

US equities were positive on Thursday with the S&P500 trading up 1.72% and the DJIA trading up 1.59%. The European bourses are also positive with the FTSE trading up 1.52%, the DAX up 0.62% and the CAC 0.66%. The NIKKEI and the HSI at the time of writing are trading up 1.02% and up 1.19% respectively.

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