The euro had one heck of a week, yo-yoing all week before settling on Friday. The majority of primary currencies tread water in advance of the monthly U.S. non-farm payrolls report, in effort to see a clear-cut sign if the Federal Reserve is going to raise interest rates.
The Norwegian crown is the biggest powerhouse in morning trade, dropping 1.2 percent against the euro after manufacturing productivity in the oil-focused economy declined nearly three percent… much more than anticipated.
On Thursday, highs were reached with a steep incline in German bond yields that resulted in the euro to increase over five percent against the dollar in more than a week. However, since that time, it dropped over a cent.
The bond market is still in the action with investors and traders both noting the signs that the European economy is moving past its worst, justifying their statement with yield increases.
This view is supported by the increase in growth predictions of Germany’s Bundesbank and the Spanish industrial production.
A senior currency trader for London’s international bank said the market is ever-changing.
The trader said things do appear to getting better – the euro has seen its bottom and it’s starting to rise again.
The market is looking at the U.S. economy, which is also at a crucial point. It didn’t have a good first quarter with the data coming in from April being mixed. This supports the assumption that the Fed may decide to wait until 2016 before they raised the interest rates. However, many banks are still requesting a hike in September.
Economists feel the report is going to show that U.S. employers added over 225,000 jobs during the month of May, reinforcing the September movement.
Global-info Co Director Kaneo Ogino said if the amount is within the anticipations, the dollar could actually hit 125 again. Global-info Co is located in Tokyo and is a foreign exchange research firm.
Ogino said there are several commercial orders looking to purchase on dips should the payrolls turn out bad, and if the dip doesn’t come about, they will need to cover those higher amounts.
Greece continues to fight leaders to come up with a potential deal to avoid a default that continues to hover in the “euro” background. The country didn’t make a primary debt payment to the International Monetary Fund because Prime Minister Alexis Tsipras wanted changes that would toughen terms from creditors for assistance.
The index which tracks the dollar against an array of currencies was still on target for a weekly beating of over one percent.