Euro dollar rate today (Tue 22/10): EUR forecasted to struggle against the US dollar on back of good NFP figures
Analysts are looking for a reading of 180K, up from last month's 169K.
A look at the spot markets at 09:12 in London shows:
- The euro dollar exchange rate is today 0.03 pct lower at 1.3677.
- The euro pound exchange rate is 0.09 pct higher at 0.8480.
- The euro to Australian dollar rate is 0.09 pct lower at 1.4162.
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Ahead of the big event for the currency markets, due at 13:30, UniCredit Bank tell clients they are backing US dollar gains today:
"EUR-USD is likely to retreat in the wake of stronger US labor data today, but we expect 1.36 to hold and favour buying the EUR on dips in the near term on the back of the still-unresolved US fiscal impasse."
Emmanuel Ng at OCBC Bank is also sceptical of the possibility of any major gains by the Euro:
"The pair may continue to be capped around 1.3705 ahead of the US labor market numbers tonight and any hint of a positive surprise from the numbers may invite a consolidation towards 1.3645.
"As noted yesterday, apart from expected dollar volatility stemming from US data releases, the slew of EZ PMIs on Thursday and the German Oct Ifo on Friday may also potentially sway the EUR-USD. In the background, coalition talks in Germany are also due to begin mid-week with parliament to convene for the first time since the recent elections."
US dollar rally unlikely
While the above commentators suggest the US dollar will make a comeback, Geoffrey Yu at UBS says he does however not see the prospect of a stronger, more lasting, US dollar rally ahead:
"The long-awaited September payrolls report is due on Tuesday and it appears that markets have become a bit more partial to the prospect of a dollar rally after all.
"In the event that Congress can get its act together well before the next shutdown/debt ceiling deadlines, there is no reason to doubt whether the Fed can start to contemplate longer-term policy.
"This has not been reflected in Fed commentary yet, mostly because of data paucity and the Fed’s continuing ongoing communications calibration. Even if markets do start to see a critical mass of positive data and speeches, a repeat of dollar performance in Q2 is unlikely."