USD slips ahead of jobs report

As last Friday was the 1st of the month, The US employment report is scheduled to be released this afternoon, the second Friday of the month. The markets are expecting a drop in the number of fresh jobs created in February to around 200,000 and a slowdown in the rise in average hourly earnings to around 4.4% on the year. That would help to ease inflation and the markets would see that as an opportunity for the Fed to start talking about earlier interest rate cuts. That data, combined with next week’s US inflation data, will be the driving factors in the value of the US dollar over the coming week. Ahead of the jobs report the US dollar has lost a little bit of ground. GBP/USD has levelled off at $1.2800 and, having spiked to $1.0950 overnight, the EUR/USD right is a tad lower at $1.0930 this morning. We have eurozone GDP data today, so that may shuffle this pair but more of that below.

Eurozone GDP – has recession been averted?

This morning’s eurozone gross domestic product data is on the cusp of confirming two-quarters of contraction and therefore, by definition, a recession in the eurozone. However, some forecasters believe there will be marginal growth of 0.1%, narrowly avoiding the political embarrassment of a recession. The euro is a little weaker ahead of that data. The weaker US dollar has allowed the EUR/USD rate to rise a little ($1.0930 this morning) But the GBP/EUR rate is trading at €1.1715 And has been a tad higher than that overnight. If a eurozone recession is confirmed, we ought to see further euro weakness but any kind of growth number will bring euro buyers back into the market.