- Euro area employment continued to expand despite the persistent and pronounced weakness in euro area.
- EUR weighed down by soft national inflation data but attracting bids on a tighter labour market.
EUR/USD was somewhat robust overnight considering the US Dollar’s rise to fresh cycle highs in the DXY. The single currency traded between 1.0950 to 1.0885, steadying around 1.0900, weighed down by soft national inflation data but attracting bids on a tighter labour market.
Euro area employment continued to expand despite the persistent and pronounced weakness in euro area manufacturing, analysts at ANZ Bank explained:
“The unemployment rate fell to 7.4% in August from 7.5% in July and 8.0% a year earlier. That was the lowest rate of unemployment since May 2008 and close to pre-GFC lows. In spite of the slowdown in Germany, unemployment fell 10k. The improving labour market is providing some offset to weakness in manufacturing, but inflation still remains subdued. In September, Germany HICP inflation was 0.9% y/y, down from 1.0% y/y in July.”
Key US data kicking in
Meanwhile, looking ahead, we have key US data coming up in the September ISM data this week from the Institute for Supply Management (ISM) is due in the NY session, “providing an update on sentiment in the sector and some guidance for the payrolls report due Frida,” analysts at Westpac explained:
“The August headline index of 49.1 was the weakest reading since Jan 2016. Consensus for Sep is 50.1. Aug construction spending is also due, with potential implications for Q3 GDP estimates.
EUR/USD levels
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