While Beijing is trying to stabilize the situation on stock and currency exchanges, the market gradually returns to normal, starting to quickly respond to macroeconomic statistics. The rally in EUR/USD in the European and American sessions FOREX was closely associated with the publication of data on business activity in Germany and in the States, on reduction of unemployment in the Eurozone to the level of 10.9%, the lowest in the last three years, as well as "dovish" rhetoric from fed officials. According to the Federal reserve Bank of Boston President Eric Rosengren, international disasters, coupled with the problems of commodity markets force it to revise the forecasts for GDP and inflation and may force the Federal reserve to pause in the process of raising the Federal funds rate, no matter when he started.
We have to admit that the situation in the Eurozone compared to March, when the pair EUR/USD reached the bottom for a dozen years, has improved significantly. The yields of the debt instruments market increased, limiting the risks of transfer of capital; monetary aggregates M1 and M3 are steadily increasing, which, coupled with a jump in lending has a positive impact on inflation and limit the angry rhetoric of the ECB at the September meeting; the status of the current account and employment increases optimism. One recent positive signals was the growth of German manufacturing PMI in sectoral August to its highest level in four months, which allowed the EUR/USD is the time to rise above the base of the thirteenth figure. American business activity, on the contrary, disappointed. The indicator fell to the bottom since may 2013, once again prodigalities about the problems of industrial areas, including those associated with a strong dollar, limiting exports.
Honestly, rally the main currency pair on the background of the different statistics from the Old world and the States seems logical, however I have now noticed two things. To increase the sensitivity of the dollar pairs to releases of macroeconomic indicators and drivers of growth of the U.S. GDP. It's no secret that most of the services, the dynamics of PMI from ISM in this sector contrast nicely with the state of Affairs in the manufacturing sector.
If the market beginsto quickly respond tothe statistics, itreleasesa strongPMI datainthe non-manufacturing sector, foreign tradeand employmentin the U.S.can radicallychange the situation, particularly with regard tothe release of thefigures onnon-farm payroll, the dynamicsof which is closelycorrelatedwith changesin the numberof applications forunemployment benefits. The strengtheningof the downward trendon the latest indicator– a clearpositive for the labour market andthe entireU.S. economy.
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