Focus on US Jobs as Euro Takes a Breather

By ForexBrokers · Filed Under News Leave a Comment 

The Euro witnessed a rare upswing in times when it is considered to be one of the riskiest currencies in the world. After two days of continuous losses and bad news, the Euro registered minor gains on Thursday, August 2. Experts however, were not optimistic about the prospects and were of the opinion that the gains were very fragile. This reaction was prompted due to the European Central Bank’s lack of action. The bank did not take any action nor release any news regarding the revival of sovereign bond-buying program.

Euro could be Driven to Two Year Lows

Italy and Spain were hopeful that the bond buying program would resume as it would be advantageous to their prospects. With the resumption of the buying program, the borrowing costs for Italy and Spain, which are currently very high, could have been significantly lowered. However, the hopes of investors were dashed and most of them were disappointed by the European Central Bank’s lack of action. The experts also felt that this had the potential to drive down the Euro further. Many of them were of the opinion that the Euro could hit a mark below $1.2050 in the near future.

Focus Shifts to Jobs in the US

Analysts were looking forward to the non-farm payrolls numbers from the United States. If those numbers were weak, it would mean that there could be more conjecture about how the Federal Reserve would have to hurt the dollar by easing the policy they have adopted. However, solid numbers would mean that the dollar will further assert itself in the market and the Euro will have nothing but bleak days to look forward to.

Gains Made by ECB’s Bold Announcement Erased by the Greenback

Recently, the president of the ECB, Mario Draghi, had made a statement which had given the Euro a much needed boost. On behalf of the bank, Mr. Draghi had announced that they would do everything possible and within the abilities of the bank to defend the currency. This statement had raised expectations and the Euro has witnessed a slight gain on this hope. However, the Greenback has demolished the feeble gains and the payrolls numbers will be another major factor in deciding Euro’s prospects.

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