- EUR/USD has wiped off its entire gains recorded in early Tokyo as DXY rebounds.
- Declining US NFP is not bad for the DXY as the economy has reached its full employment levels.
- The delay in policy tightening measures by the ECB may result in an untamed inflation rate.
The EUR/USD pair has erased its entire gains recorded in the early Asian session. The asset has tumbled to near 1.0160 and is expected to display more losses after violating Thursday’s at 1.0144. A rebound in the risk-off market mood has pushed offers to the counter.
It won’t be wrong to state that the US dollar index (DXY) has resumed its upside journey after a corrective move and the asset is healthy to print a fresh 19-year high going forward. The asset has displayed a responsive buying action after slipping below the critical support of 107.00.
In today’s session, the release of the US Nonfarm Payrolls (NFP) will be of utmost importance. A preliminary estimate for the job additions data is 270k, significantly lower than the prior release of 390k. It is worth noting that the economic data is increasing but at a diminishing rate from October 2021, except February 2022, when the agencies recorded job additions by 714k.
Investors might find the data incompetency from the US administration on creating more job opportunities. However, one should understand that the employment level in the US economy has reached its full employment targets and also sustaining at the same. So less room for more job additions is not a shortcoming for the DXY.
On the eurozone front, the shared currency bulls are worried over escalating recession fears. The economy is likely to face a shortage of energy as it has not revealed the names of alternative suppliers of oil and gas after initiating the gradual process of prohibiting oil imports from Russia. Apart from that, the delay in policy tightening measures by the European Central Bank (ECB) may result in an untamed inflation rate.
