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May 17 - 11:55 AM

EUR/USD - COMMENT-EUR/USD Longs Look To US Claims Data For Potential Rescue

By Christopher Romano  —  May 17 - 10:05 AM

EUR/USD struck a 1-1/2-month low Wednesday as concerns China's sputtering economic recovery may negatively impact euro zone growth and the pair's slide may extend if Thursday's U.S. claims data does not cooperate.

Initial jobless claims USJOB=ECI are expected to drop to 245k from last week's 264k result while continuing claims USJOBN=ECI are forecast to increase to 1.818m from 1.813m.

Both data points have been trending upward since March 2022 and the weekly claims upward trend accelerated sharply beginning March this year.

An upside surprise would suggest the U.S. jobs market could be softening further, leading U.S. rates to ease and reinforcing expectations for Fed rate cuts later in 2023 SRAU3, FFZ3.

That would erode dollar's yield advantage over the euro, and the recent trend of wider U.S.-German 2-year spreads US2DE2=RR, which EUR/USD is correlated with, may abate or reverse.

EUR/USD's fall from the April 26 daily high may reverse as weak shorts may cover positions.
April's monthly low would remain untouched, which would keep the consolidation phase of gains off the March monthly low intact.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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