EUR/USD has been on the back foot after President Trump announced he contracted coronavirus. US Nonfarm Payrolls, the fate of US fiscal stimulus and further reactions to the bombshell news are eyed, FXStreet’s analyst Yohay Elam reports.
See – Non-Farm Payrolls Preview: Nine major banks expectations for September jobs report
Key quotes
“The leader of the world’s most powerful country and his wife tested positive for coronavirus after Hope Hicks, a senior adviser, also caught the disease. The bombshell news threw markets into disarray, as it raises many questions. How will it impact the elections? On the one hand, sympathy toward Trump could help his chances, but the renewed focus on his mishandling of the crisis may hurt the probability of him winning the elections.”
“While Republicans and Democrats have yet to reach a deal, it seems that investors are more focused on the next relief package than who becomes the next president – at least for now. The focus on the president’s virus lowers the chances for a deal.”
“The safe-haven greenback is on the rise but remains somewhat hesitant – typical to trading ahead of the Nonfarm Payrolls. The jobs report for September is set to show an increase of 850,000 positions, fewer than in August but still a robust statistic in absolute terms. The unemployment rate is forecast to fall from 8.4% to 8.2%.”
“A robust NFP report should be positive for stocks but has to be taken in the context of fiscal stimulus talks – as it could lower the motivation for lawmakers to strike an accord. Conversely, a disappointing statistic could turn into good news, as it would push the parties over the line.”
“COVID-19 cases are on the rise in the old continent and continue weighing on the common currency. Economists expect the preliminary Consumer Price Index to show subdued inflation, in both the headline and Core CPI.”
Share
