Bulls of the EUR/USD currency pair are taking a break following their recent heavy run. They successfully ground higher to 1.0250 in the first part of the Asian session on Friday. By doing that, the pair showed typical caution as the market anticipate the Non-farm payrolls from the US.
Highest Rise in Two Weeks
That said, the pair has risen to its highest in a matter of thirteen days as the US Dollar experiences a general weakness. There were stronger reports around data from Germany on Thursday. The factor orders from the country fell by 0.4% month-on-month against the expected value of -0.8% and the initial figure of -0.2%.
EUR/USD price chart. Source TradingView
The hope that an economic recovery in the Eurozone was in sight helped to add some weight to the Euro. His was in spite of the energy crisis engulfing the bloc. It is mainly because the ECB is buying off bonds, according to its recent Economic Bulletin.
As for the US, jobless claims increased to 260,000 in the week ending on the 30th of July against 254,000 before that and the expected 259,000. Furthermore, the trade balance over goods and services got an improvement to -79.6 billion dollars against the market expectation of -80.1 billion dollars and -84.9 billion dollars recorded before.
In spite of the mixed records, the market remains largely hopeful about the Federal Reserve’s aggressive policy. But it might not be sufficient to lift the US out of the fears of the expected recession.
Watching Chinese Moves
The lack of significant instances in the course of Speaker Pelosi’s visit to Taiwan could be in the same line. All in spite of the verbal conflict going on.
The slow economic movement escalated when the Bank of England acknowledged recession concerns and the possible hardship. The President of Cleveland’s Fed, Loretta Mester, stated that there have been increased recession concerns in the US also.
Note that the military drills which China claims to embark on have intensified geopolitical tensions. Five dud missiles are said to have landed in the Japanese economic area. It adds to the tension between the US and China and might have posed a challenge to the US Dollar.
Wall Street closed on a mixed note against these backdrops. Trading yields went down for the second day in a row at 2.69%. It also adds more pressure on the US Dollar as key reports are anticipated.
Traders of the EUR/USD pair might have to wait to see the Non-farm Payrolls report for July. It is expected to provide clarity in the face of recession and the Fed’s aggressive policies.