Dollar Strength Ahead of NFP-Report
Dear Traders,
We welcome you to the trading month of October.
The euro declined against the greenback after consumer prices in the Eurozone turned negative for the first time in six months. The drop in the region’s inflation rate fuel arguments that the European Central Bank could step-up monetary stimulus.
Meanwhile, the U.S. dollar received support from a stronger than anticipated ADP employment report. The improving outlook for the labor market is among the Federal Reserves’s reasons to raise interest rates.
The pound sterling took a brief look above 1.5210 but was not able to maintain that level and headed for a test of 1.5110. As anticipated in yesterday’s analysis, the level around 1.5110 – 1.5090 may lend a support for the currency pair. We will wait and see.
Sterling traders should keep an eye on the U.K. PMI Manufacturing report, scheduled for release at 8:30 GMT. If data surprises to the upside, GBP could gain ground.
Furthermore, we will watch the release of the U.S. ISM Manufacturing index, due at 14:00 GMT.
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