The Euro is back to growing. Overview for 07.01.2019

The major currency pair is getting more expensive on Monday morning; the FOMC’s rhetoric is against the USD. 

On Monday morning, EURUSD is rising actively. The current quote for the instrument is 1.1427.

The first week of 2019 was rather volatile: on January 2nd, the first trading session of the year, the pair was trading in the range of one and a half figures on relatively small volumes. 

The statistics on the US labor market in December turned out to be surprising, to put it mildly. The Unemployment Rate went from 3.7% in November to 3.9% in December, although it wasn’t expected to change at all. The Average Hourly Earnings added 0.4% m/m after expanding by 0.2% m/m the month before and against the expected reading of +0.3% m/m. 

The NFP (Non-Farm Employment Change) report was impressive: the indicator was 312K in December after being 176K in the previous month and against the expected reading of 179K. 

As a result, one can see that American companies hired the maximum number of employees over the last 10 months and increased their earnings at the same time. This fact may “soften” the concerns that appeared earlier relating to inability of the US economy to keep its positive momentum and find confident support in 2019, because the labor market remains strong and isn’t going to give up its solid positions. 

However, these numbers were soon spoiled by the US Federal Reserve Chairman Jerome Powell, who said that the low inflation might allow the regulator to be more flexible when it came to the monetary policy. Powell also said that the regulator had no clear plan on the number of rate hikes in 2019. Such announcements made investors nervous. 

Later in the afternoon, one should pay attention to the Sentix Investor Confidence report to be published by the Euro Area, which is expected to decrease significantly. Another thing worth mentioning is the Retail Sales in Europe in November 2018.