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EUR USD Exchange Rate Drops -1.1% after Surge in US Jobs

An above-forecast posting for US jobs added in July has triggered a US Dollar to Euro rally on Friday afternoon.

The Euro had earlier traded at 1.1878 against the US Dollar but soon fell to 1.1753 on the late-week jobs figures.

US unemployment fell from 4.4% to 4.3%, while the non-farm payrolls measure posted 209k jobs added instead of the predicted 183k.

(First published 12:07, August 4th, 2017)

The Euro has traded tightly against the US Dollar today, but in the bigger picture, the EUR USD exchange rate is near its best level since January 2015.

  • EUR USD rate tight at 1.1878 – USD EUR trades narrowly at 0.8415
  • Euro unsettled after retail activity drop – Positive German data fails to lift EUR value
  • US concerns grow as grand jury appointed – Stakes rise in Trump-Russia investigation
  • German trade and inflation in focus next week – US jobs stats out imminently

This recent EUR USD tightness has been caused by a decline in US confidence being balanced by Eurozone retail disappointment.

Euro Update: Growing German Industry Countered by Slower Eurozone Retail Activity

Today’s notable Eurozone announcements have covered factory orders and construction in Germany, as well as overall retail activity.

Both German releases were positive, showing higher levels of construction and a still-supportive quantity of factory orders.

Less helpfully, however, retail activity slowed on the index from 53.2 points to 51. This still indicates growth, but at a level close to the sub-50 contraction range.

US Dollar Declines as Mueller Investigation Grows

As well as non-manufacturing activity declining yesterday, the US Dollar has also been harmed by the latest development in an ongoing investigation.

The investigation aims to determine any links between Donald Trump and Russian officials, as investigators scrutinise the 2016 Presidential election campaign.

The latest update is that Special Counsel Robert Mueller has appointed a grand jury. These individuals have the power to compel individuals to testify, so this represents an intensification of Mueller’s efforts to get to the truth.

The simple fact that a grand jury has been appointed has concerned onlookers, as it means that there is at least some level of evidence that has justified Mueller’s move.

EUR USD Rally Possible on Next Week’s German Ecostats

The coming week’s Eurozone data will consist mainly of German announcements.

These will cover industrial production levels on Monday, followed by the trade balance result on Tuesday and inflation rate stats on Friday.

In all three cases, estimates are for positive printings which could see steady Euro to US Dollar appreciation.

The previous trade surplus is expected to expand, while higher levels of industrial production and inflation are also on the cards.

On the other side of the equation, high-impact US data will be out later this afternoon. The national trade deficit is forecast to improve slightly, but the bigger news will be non-farm payrolls and unemployment rate results.

Covering changes in July, the unemployment rate is set to dip from 4.4% to 4.3%. This would put joblessness at the joint-lowest rate in 2017, which could inspire sharp US Dollar gains.

For the non-farm payrolls figure, 183k jobs are predicted to have been added in July. Any significant deviation on either side of this figure could provoke a USD advance or decline, depending on the circumstances.

Current Interbank EUR USD Exchange Rates

At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading at 1.1878 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.8415.