The euro continued its decline against the background of extremely weak European statistics. The index of business activity in the service sector declined from 56.2 to 54.9 while the composite index fell from 57.1 to 55.2. The data turned out to be worse than the forecasts. The growth rate of retail sales accelerated from 1.5% to 1.8%. However, the result was expected to be at 2.1%. However, the most important thing is that the previous results were revised downwards from 2.3%. The only thing that can be recorded as a plus is the rate of growth in producer prices which remained the same and did not slow from 1.6% to 1.5%. Towards the evening, the weakening of the euro become more prominent under the pressure of data on applications for unemployment benefits in the US, which fell by 40 thousand. This was significantly better than forecasts.
The central event of the day is the publication of the report of the US Department of Labor which can further strengthen the dollar. The unemployment rate should decrease from 4.1% to 4.0% and the growth rate of the average hourly wage is likely to accelerate from 2.6% to 2.7%. Also, the share of labor in the total population should increase from 63.0% to 63.5%. The number of new jobs is likely to be at 193 thousand. Meanwhile, the previous month showed that created jobs were at 313 thousand. However, this will not affect investors in any way, since all other indicators look very good.
The EUR/USD pair should decline to 1.2175.
