They are still selling the Euro. Overview for 06.02.2019

The major currency pair is still being sold in the middle of the week; the USD is attacking.

On Wednesday morning, the Euro remains under pressure against the USD. The current quote for the instrument is 1.1390.

Early on Wednesday morning, the US President Donald Trump delivered State of the Union Speech. Mostly, he was speaking about a trade agreement with China, which is currently being actively discussed. Apart from this, Trump is very enthusiastic about “tit-for-tat” import duties in response to trade restrictions that may seem unfair towards the USA. He is offering to transform such duties into a new law, which may be applied to all countries that trade with the USA one way or another. 

In addition to that, yesterday the U.S. Senate approved the law concerning new sanctions against Iran, Syria, and Russia. Probably, this was some kind of support for the American currency, because the USD continues recovering. 

There will be a lot of numbers from the USA today. No reports during the day, but plenty of them in the evening. The country is scheduled to report on the Trade Balance in November (a little improvement is expected), the Nonfarm Productivity over the fourth quarter 2018 (previous +2.3% q/q, expected +1.7% q/q), and the Unit Labor Costs over the same period (previous +0.9% q/q, expected +1.7% q/q).

Judging by market expectations, the current situation on the US labor market may be described in the following way: employers, being aware of the consumer demand increase, are creating new full-time job; competition for the labor force is becoming more active, which is confirmed by salary growth in October and November, and working conditions (benefits package, etc.) are improving as well,  which is confirmed by the Unit Labor Costs. In general, the situation on the labor market is looking very positive for job applicants. The stronger the labor market, the more confident the US Federal Reserve with its monetary policy is and the better for the USD.