EUR/USD Big Picture: Weekly Preview (1-5.04.2024)

EurUsd Big Picture - Quantum Strikes
EurUsd Big Picture - Quantum Strikes

As the first week of April unfolded, the EUR/USD currency pair navigated through a landscape marked by pivotal economic indicators and central bank speeches, shaping the trajectory of the pair amidst global market sentiments.

Monday: Manufacturing Data and Market Sentiments

The week commenced with a flurry of manufacturing Purchasing Managers’ Index (PMI) releases. In the United States, the S&P Global Manufacturing PMI for March stood at 52.2, slightly below the anticipated 52.5, while the ISM Manufacturing PMI reported 47.8, missing the consensus forecast of 48.4. These figures reflected a nuanced view of the manufacturing sector’s performance, contributing to market volatility and impacting the USD’s valuation.

Tuesday: Eurozone Economic Indicators

Eurozone data took center stage on Tuesday, with the HCOB Manufacturing PMI for March in Germany recording a reading of 46.5, falling short of expectations. Additionally, Eurostat’s release of the Eurozone inflation rate for March signaled a climb to 2.5%, surpassing the forecasted 2.2%. These figures underscored the ongoing challenges within the Eurozone economy, influencing investor sentiments towards the EUR.

Meanwhile, in the US, the JOLTs Job Openings for February came in at 8.863 million, slightly higher than the previous figure, indicating a robust labor market, which lent some support to the USD.

Wednesday: Unemployment and Inflation Data

Midweek, the focus shifted to Eurozone unemployment and inflation data. The Eurozone’s unemployment rate remained unchanged at 6.4% in February, while the Consumer Price Index (CPI) for March climbed to 125.5, in line with expectations. Despite these stable figures, concerns persisted regarding the Eurozone’s economic growth prospects amidst global uncertainties.

Simultaneously, in the US, the ADP Employment Change for March reported 140,000 jobs added, exceeding the anticipated 130,000, offering a positive outlook for the labor market and potentially bolstering the USD.

Thursday: Services Sector Performance and Labor Market Data

Thursday saw the release of Eurozone Services PMI data, with the HCOB Services PMI for March posting a reading of 50.2, indicating modest expansion in the services sector. Meanwhile, in the US, continuing jobless claims for the week ending March 23 slightly decreased to 1,819,000, while initial jobless claims for the week ending March 30 rose to 210,000, alongside an increase in the 4-week average. These mixed signals further contributed to market volatility and influenced investor sentiment towards the USD.

Friday: Retail Sales and Labor Market Report

The week concluded with Eurozone Retail Sales for February reporting a slight contraction, with a month-on-month change of -0.3%, and a year-on-year change of -1.2%. Conversely, in the US, the Unemployment Rate for March remained steady at 3.9%, while Non-Farm Payrolls surged to 275,000, surpassing the forecasted 200,000. These robust labor market figures provided support for the USD as the week drew to a close.

Conclusion

Throughout the week, the EUR/USD currency pair navigated through a landscape shaped by economic data releases, central bank speeches, and global market sentiments. While Eurozone indicators highlighted ongoing challenges within the region’s economy, robust US labor market data bolstered the USD’s position. As geopolitical and economic factors continue to influence currency markets, market participants remain vigilant for further developments shaping the EUR/USD exchange rate in the coming weeks.