The market remains tensed as the focus shifts to the US economy today with the labor report on queue for release. The market skirmish to print the outlook for the recovery and the global economy is not resting on US shoulders as the debt debate subdues in the market.
Surely, the jobs figures projected are not bad, where median estimates see the economy added 150 thousand jobs in November taking the total jobs to around one million this year, while the jobless rate is projected to have held at 9.6%. The fears are evident especially with the volatility in the data in the past months as it usually misses forecasts by a big difference.
This sentiment and fears over the outlook with a slight unwinding of pessimism keep the dollar biased to the downside in the European session. The dollar index slipped to trade at the lowest of 79.92 after setting the high of 80.30 and currently around 80 areas. The index extended the third daily decline as market woes started to ease and unwind the haven demand on the dollar.
We surely do not see a drastic change in the outlook expectations, yet it's a correction and badly needed in the market, especially for the dollar and the euro. The excessive over joy for the US futures and the extra pessimism over the euro area and the debt crisis is starting to balance out and accordingly weighing on the dollar for now and the euro supported to unwind some losses.
The euro is trading bullishly for the third consecutive day and currently hovers around 1.3252 supported by the upside revision to the industry data as the services expansion continued stronger than expected in November easing slightly the fears over the state of the economy. The pair still might continue to the upside towards 1.3390 but the jobs figures will confirm if the euro can continue to the upside or reverse towards 1.3090 support.
As for sterling, it also rose on the back of the weak dollar and the slight relaxed sentiment over Europe's debt crisis after the ECB took more steps to ease the discomfort, where the risk appetite helped sterling offset the weak services PMI. The pair is hovering around 1.5655 recording so far the high of 1.5681 and the low of 1.5578. The intraday movement is also tied to the market's realization of the jobs figures where if the pair didn't stabilize above 1.5645 it has the potential to reverse lower today.
We should observe the market closely as the volatility will extend further with the release of the US jobs report.