HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
MultiBank Group information and reviews
MultiBank Group
84%

Will the US NFP Report Resurrect the Ailing Dollar?


8 January 2024 Written by Sandro Pontedra  Finance Industry Expert Sandro Pontedra

In January, the Euro area witnessed a modest improvement in investor sentiment, as indicated by the Sentix Investor Confidence Index, which rose slightly to -15.8 from -16.8 in December. This marginal increase suggests a cautious optimism among investors regarding the economic outlook of the Eurozone. However, the overall sentiment remains in negative territory, reflecting ongoing economic challenges.

Analysis of Sentix Survey Findings

Sentix, in its analysis of the survey, expressed caution, indicating that this improvement should not be misconstrued as a sign of a significant economic turnaround in the Euro area. The report particularly highlighted concerns about Germany, the Eurozone's largest economy, which continues to grapple with recessionary pressures. This situation in Germany is a critical factor influencing the broader Euro area's economic health and investor confidence.

Market Reaction to Investor Confidence Data

Following the release of the Sentix Investor Confidence data, the Euro showed signs of weakness against its major counterparts. The EUR/USD pair, a key indicator of Euro's strength, was trading down by 0.15% at 1.0925 at the time of the report. This decline reflects the market's tempered response to the slight improvement in investor sentiment, weighed down by broader economic concerns in the Eurozone.

EUR/USD Outlook: Stability and Forecasts

The EUR/USD pair has been experiencing relative calm, particularly noted in its virtually unchanged position around 1.0950 at the end of the previous session. However, economists at ING suggest that the pair is on unstable ground for this quarter. Despite the slight uptick in positive sentiment from softer US data and marginally better Eurozone data, the potential for sustained gains above the 1.10 level is still seen as challenging.

The expectation for the EUR/USD pair remains cautious, with a forecast targeting a return to the 1.08 mark over the course of the quarter. This outlook is shaped by the persisting uncertainties in the Eurozone economy, including recessionary pressures in key member states like Germany and the overall negative investor sentiment despite recent modest improvements.

Conclusion

In conclusion, while the Eurozone's Sentix Investor Confidence Index shows a slight improvement in January, the broader economic challenges in the region, particularly in Germany, continue to cast a shadow over the Euro's performance. The cautious market reaction and the outlook for the EUR/USD pair underscore the fragile economic environment in the Euro area and the potential for continued volatility in the currency markets.


RELATED

Dollar recharges, Euro drops on French politics

The US dollar entered the week on a strong footing, gaining against all its major peers on Monday and corroborating the notion that last week’s retreat may have been due to liquidation of long positions ahead of the Thanksgiving break.

3 Dec 2024

Dollar extends retreat ahead of US Thanksgiving

It’s Thanksgiving Day in the US and Wall Street will remain closed today. However, the FX market never sleeps and thus, potentially low liquidity due to the holiday may be a reason for some volatility in the US dollar.

28 Nov 2024

Dollar and gold gain as geopolitical risks and eurozone data worsen

Gold continues to gain, as geopolitics generates headlines. Hawkish Fedspeak and strong US data support the dollar. Euro suffers from another weak set of PMIs. Yen fails to benefit from stronger inflation.

22 Nov 2024

Dollar wavers on US CPI, surges on hawkish Fed remarks

Dallas Fed chief Lorie Logan said the central banks should “proceed with caution” and St. Louis Fed President Alberto Musalem echoed the sentiment. Logan even went as far as saying that the Fed funds rate is at the top end of the estimated neutral rate, suggesting minimal scope for additional rate cuts.

14 Nov 2024

Dollar gaps down as Trump seems to be losing Iowa

The dollar finished Friday’s session up against most of its major peers, despite nonfarm payrolls slowing to 12k last month, the smallest gain since December 2020.

4 Nov 2024

Dollar slips amid stronger yen and euro, data barrage continues

he yen firmed up on Thursday after the Bank of Japan struck a somewhat more hawkish-than-expected tone as it kept rates on hold but signalled it remains on track to raise rates further.

31 Oct 2024

Dollar, gold and US yields continue to rise

The euro is desperately trying to show some signs of life and recover against both the US dollar and the pound. But the continued dovish commentary from ECB officials and the weak euro area data prints are acting as strong headwinds.

23 Oct 2024

Dollar seeks direction amidst tepid market conditions

Fed speakers and minutes in the spotlight today; Dollar’s rally pauses, but oil and gold suffer losses; RBNZ cuts rates by 50bps, kiwi weakens; China schedules another press conference as local stocks plunge

9 Oct 2024

Dollar extends gains on upbeat US data

The dollar extended its gains against its major peers on Wednesday and during the Asian session Thursday.

3 Oct 2024

Dollar bounces back as stocks lifted from more Chinese stimulus

US dollar rebounds ahead of Powell and other Fed speakers. US futures also turn positive as Asian rally continues on China optimism. SNB cuts rates by 25 bps as expected as ECB mulls October cut.

26 Sep 2024

China's stimulus blitz supports positive equities sentiment

Dollar tries to recover as Fedspeak favors further cuts. China announces new measures, positive initial market reaction. Aussie benefits from another hawkish RBA meeting. Gold, oil and pound rallies continue.

24 Sep 2024

Dollar's mixed performance continues, yen benefits

Amidst these developments, the US dollar’s performance has been mixed this week. It has been losing ground against both the euro and the pound but gaining versus risk-on currencies like the aussie and the kiwi.

5 Sep 2024

Dollar gains amid adjusted Fed rate cut bets

PCE inflation holds steady, 50bps cut less likely. Euro slips as Eurozone inflation drops to lowest in three years. Wall Street gains on soft-landing hopes.

2 Sep 2024

Dollar edges up ahead of PCE inflation as stocks drift

All eyes on US core PCE and consumption as bets for 50-bps cut stall. Dollar headed for weekly gains but Nasdaq has disappointing week. Euro on the backfoot as soft Eurozone CPI cements September cut.

30 Aug 2024

Dovish Fed and labor data weigh on dollar

Fed minutes reveal some members wanted a July cut. Nonfarm payroll growth revised down by the most since 2009. PMIs in focus ahead of Powell's Jackson Hole speech.

22 Aug 2024

Euro/dollar in critical area as the Jackson Hole Symposium nears

Stocks record strong weekly gains as the first Fed rate cut gets closer. Markets are gradually preparing for the Jackson Hole gathering. Euro/dollar trades within a critical resistance area. Gold in demand as geopolitics generate headlines.

19 Aug 2024

Bitcoin's bear rally?

The cryptocurrency market has survived the peak of fear, finding the strength to consolidate during European trading and begin a recovery during active hours in the Americas.

7 Aug 2024

Markets breathe easier but will it last?

Slightly more positive tone in equity markets today. Fear of recession fuels Fed rate cut expectations. Light calendar today, focus on data during Asian session. RBA remains hawkish, considers rate hike.

6 Aug 2024

Fed hints at cut but dollar unbruised, pound slips ahead of BoE

Fed's Powell opens the door to a September rate cut, stocks rebound. But dollar only tumbles against the yen, which surges after BoJ hike.

1 Aug 2024

Yen on the front foot as BoJ hike eyed

Yen looks to extend gains as BoJ set to press ahead with policy normalization. Gold and oil in tepid rebound despite heightened tensions in Middle East.

29 Jul 2024

XM information and reviews
XM
82%
FP Markets information and reviews
FP Markets
81%
FXTM information and reviews
FXTM
80%
AMarkets information and reviews
AMarkets
79%
Octa information and reviews
Octa
79%
BlackBull information and reviews
BlackBull
78%

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.