Forex
EUR/USD Forex Market Pressured Ahead of Key Data

- Dollar Strengthens as Fed Looks Forward
- NFP Jobs Data Awaited
- Markets Cautious as Traders Await News
The Euro forex market trading against the US Dollar has been under pressure today as the Dollar bounces back with a show of strength ahead of NFP jobs numbers to be released today. Rumor coming from the Fed suggests that tapering could be introduced sooner than expected. This is one major factor that has seen the Dollar move higher. On jobs, analysts expect anything up to 845,000 jobs to have been added in the past month. Meanwhile, on Wall Street, trading in the pre-market remained cautious as most wait for updated figures.
Treasury Yields Boost Helps Dollar
Those forex trading the US Dollar this week has been met by a strengthening currency on the back of a couple of key factors. Mainly, these include the rising treasury yields which have held a very low position for quite a long period. Also, an issue is the general feeling that the Fed will start tapering its bond-buying sooner than expected, though this has not been announced or confirmed as yet.
These issues have both caused the USD to rally ahead of the employment numbers due later today. They could also be seen as positive signs of an economy that is getting back to work. There are still some concerns around the COVID-19 case number though. This has continued ticking up and is now at its highest level in several months at 100,000.
Job Numbers are Next Key Driver
The most important numbers to be released today come from the Labor Department. These are the NFP job numbers. The estimate from analysts on where this number will come out are all over the place. These range from a low estimate of 350,000 to a high point of 1.2 million jobs. The central number expected is 845,000 jobs to have been added in the last month.
Forex brokers will be expecting to see movement in the market depending on the number that is announced. Anything too low would point to a less than impressive continuation of the economic recovery. By the same token, a high number may further add to the worry around inflationary pressure and hasten calls for rates to increase and tapering to come into effect quickly.
Caution Takes Hold in Early Trading
It is the same story on Wall Street with traders in the early hours of the pre-market adopting a cautious, wait-and-see approach. Futures trading across all of the major indices is flat with most opting to hold out for the news.
This comes after a strong finish to yesterday with the Dow Jones, S&P 500, and NASDAQ all ending the day in positive territory, and closing in on a positive week overall. The key issues impacting whether the week can end on a positive note are still the NFP job numbers and any further news on Fed policy which will be closely watched.