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Oct 06 - 01:55 PM

EUR/USD - COMMENT-It May Take More Than A Small Payrolls Disappointment To Boost EUR/USD

By Christopher Romano  —  Oct 06 - 10:10 AM

EUR/USD's deepening funk following hawkish ECB accounts suggests it will take more than a minor downside surprise in Friday's U.S. jobs report to improve the euro's fortunes.

ECB policymakers worried about elevated inflation, according to accounts of their September meeting nF9N2Z002M, leading investors to increase their terminal-rate bets FEIU3, while leaving intact expectations for a 75 bps hike on Oct.

EUR/USD slid after the news, falling below the 21-day moving average after erasing overnight gains and threatening key short-term support in a reaction that indicated investors were focused on the growth-sapping effects of further hikes.

Highlighting that view, a source told Reuters that the German government had cut its 2022 growth forecast to 1.4% from its projection of 2.2% in April and was expecting a contraction of 0.4% in 2023, while inflation is seen rising to 8.0% in 2023 from 7.9% in 2022 nS8N2ZK0BN.

Even a rise in Challenger layoffs to 29.99k in September from 20.49k in August and upside surprises in jobless claims failed to lift EUR/USD nL1N3161AZ.

The price action suggests longs need a Fed-altering downside surprise to September non-farm payrolls to get EUR/USD rallying.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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