The world markets are completely focused on US-Chinese relations. In this wave of markets, including foreign exchange, there is high volatility and a nervous reaction to both negative news and encouraging messages.
On Friday, released data on employment in the US were extremely disappointing. According to them, the U.S. economy received 103,000 new jobs in March, although it was expected to be 193,000. It is important that the February data was revised upward to 326,000. The unemployment rate remained at the same level of 4.1%. However, what kept the dollar from falling is the release of data on the average hourly wage, which added 0.3% in March, which coincided with the forecasts.
It turns out that the figures for employment showed a local decline, but the growth of wages continued. In our opinion, it is wage data at the moment that plays a significant role in understanding whether inflationary pressures will intensify or not, and, based on this, how actively the Fed will raise interest rates. The figures on wages indicate the preservation of inflationary pressures and even its smooth strengthening, which does not allow the dollar to decline.
Today, despite the absence of important events and economic news, investors' attention was drawn to the publication of data on the volume of exports and imports, as well as the balance of Germany's trade balance. The figures were disappointing. The volume of exports fell in February by 3.2% against a decrease of 0.4% a period earlier and expectations for an increase of 0.2%. Import volume fell by 1.3% against the forecast of growth by 0.3% and decline earlier by 0.2%. The trade balance fell significantly in February, to 19.2 billion euros against the forecast of growth to 23.1 billion euros and the previous value of 21.5 billion euros.
The published data vividly confirmed that the German economy is slowing down this year after a marked revival in the past. This may be an important signal for the ECB not to rush to stop incentive measures at least and, as a maximum, not to hint at the possibility of starting the process of increasing interest rates next year.
Forecast of the day:
The EUR/USD pair is consolidating in the narrow range of 1.2255-1.2290. It is likely that it will remain in the wave of low activity of market participants for today. But if the level of 1.2290 has been overcome, the price may rush to 1.2335. At the same time, the decline below 1.2255 will lead to a drop to the level of 1.2200.
The USD/JPY pair is trading in the range of 106.85-107.15. It is likely that today it will remain in it. But if the level of 107.15 is overcome, there is a probability of growth to 107.50. At the same time, the decline below the 106.85 level may help to reduce it to 106.65.
