New missile launches by North Korea frightened the Japanese and the world community. It is because this time, one of the ballistic missiles flew over the territory of a Japanese island. However, on Wednesday these fears have already were somewhat dissipated. This helped the investors' demand for risky assets.
The events that unfold around North Korea clearly will not end by themselves, or as they say, will not be resolved. It means that the opposing sides, the USA and the DPRK, will have to establish contact and negotiate. However, the problem is that it will be very difficult for Trumps, who is under pressure from his opponents, to do so. This is why there is a high risk of over-development for the verbal confrontation to turn into a real hot war.
Against this backdrop of geopolitical risk, one should expect from time to time the growth in demand for risk. Then, on the contrary, also its fall. There is a probability that the North Korean geopolitical knot will continue to "conduct" for a long time in the markets.
Today, there will be data on the number of new jobs in the private sector from ADP. According to the forecast provided by the agency Bloomberg, the American economy received 185,000 new jobs in August. For the month of July, they registered 178,000. The range of consensus forecast suggests a spread of figures from 145,000 to 245,000.
It can be assumed that if the statistics are not worse than expectations and demonstrate a greater growth in the number of jobs, it will provide local support to the US dollar. However, that's it and nothing more because the uncertainty surrounding the political situation in the United States and doubt of rates being raised before the end of this year will put pressure on it.
At the same time, the euro may continue to decline on the wave of strong technical overbought, which was a good reason for profit taking before the ECB's important meeting on monetary policy next week.
Forecast of the day:
The EURUSD pair resumed corrective downward movement. Overcoming the level of 1.1950 gives it the opportunity to continue falling to 1.1880 or even to 1.1820. This decrease can increase on the wave of positive data from ADP.
The GBPUSD pair is testing the level of 1.2915, losing support from the growth of the euro. It is likely, again, against the background of good news from the US, that the pair may fall to 1.2775.
