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Euro Forex Market Pressured Despite Improving Market Mood




  • EUR & GBP Both Lower as Dollar Demand Increases
  • Poor Jobs Numbers Don’t Change Fed Outlook
  • Markets Positive as Variant Fears Subside

The Euro forex market started the new week under pressure as demand for the US Dollar recovered alongside the Treasury yields in the country. This, alongside concerns of a looming payment default in China, has weighed on the currency. At the same time, poorer than anticipated jobs data in the United States does not appear to have altered the more hawkish stance of the Fed. Inflation figures later in the week will be key. For stock traders, there have been early positive signs with fears reducing around the Omicron variant and markets getting a positive boost.

Euro and Pound Struggle to Start Week

Those forex trading the Euro have endured a torrid time of late. The currency had rebounded on some Dollar and Treasury Yield weakness last week, but today finds itself under renewed pressure. The common currency is now trading below 1.13 against the Dollar early in the European trading day.

The Pound is also stuck below 1.33 as it had been on Friday despite improving earlier last week. Traders seem to have looked beyond the miss on NFP numbers that ended last week, and the upside remains limited by a stronger Dollar with the prospect of a more aggressive Fed approach to come. Brexit concerns and in particular the uncertainty around trade still weigh on the Pound approaching Christmas while a speech from the Bank of England Deputy Governer is also slated for later today.

Fed Remains Unbowed Despite NFP Miss

Many forex brokers and traders alike were surprised by the NFP payroll numbers miss on Friday. This downside surprise came in at 210,000 for November and a long way short of the 550,000 that analysts had expected. This has not detracted from the hawkish approach of the Fed that has taken shape since the start of last week.

Most are still very much anticipating rate hikes sooner rather than later. This, along with an increased speed of tapering bond buys has managed to keep the Dollar in demand and the US policy in divergence to that of the ECB in Europe. 

Strong Start Predicted on Wall Street

Markets on Wall Street have continued to suffer through the last week as fear gripped traders in relation to the new COVID-19 variant. While this continues to dominate the headlines, there has been some more positive momentum building from those who feel the new variant may not cause as much havoc as initially anticipated. This is despite cases now having been discovered in 15 American states. 

There is green across the board for US futures markets despite enduring a losing end to last week. The Dow Jones is currently trading up more than 250 points in the pre-market with both the S&P500 and NASDAQ  following with similar gains in what is a traditionally strong period for stocks.

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.