Before the ECB steps forward this afternoon the EUR is trading cautiously. Forex is unlikely to remain serene, the Single Currency has been trading towards the weaker side of its range the past day. Mario Draghi will do his best to talk down the value of the EUR today, but little is likely to curtail the value of the Single Currency. Expect to see volatility come through the FX markets over the next few hours with sudden bursts developing as nervousness is expressed by traders.
While deflation is a word not spoken by European officials openly and their economies continue to present lacklustre growth, the EUR remains highly valued in large part due to the fact that the Federal Reserve continues to maintain a very light touch via their monetary policy in the States. Italian Services PMI were released earlier and came in with a recessionary reading. The costly EUR is doing the major European economies no favours.
Gold is ranging also. As of this writing the precious metal is near 1287.00 USD and has practiced a tight trading band. While the ECB has most investors attention this afternoon, tomorrow’s Non-Farm Employment Change numbers are getting ready for their monthly viewing and this will prove vital to these final two trading days of the week. The jobless statistics from the States remain a focal point and an important point of debate between government officials and analysts, this as the American general public remains unconvinced that opportunity in the job market has improved.
Trade Balance and Weekly Unemployment Claims will come from the U.S. today. Yesterday’s ADP jobs numbers proved slightly underwhelming. Equities have had a positive week on Wall Street. Gains have come from across the board on most major bourses. While many have held up the gains as an inspiring piece of economic robustness, quantified corporate numbers still do not match the bull market seen on the major indexes via P/E earnings – and continues to be a well spring for cynics who believe not all the future days will be so rosy as long as global conditions remain challenging.