No ambitions for the Euro. Overview for 08.02.2021
Early in another February week, EURUSD remains in the same position; market players favor the “greenback”.
The major currency pair remains under pressure on Monday. The current quote for the instrument is 1.2040.
Last Friday, Joe Biden defended his administration’s $1.9 trillion COVID-19 stimulus plan and warned that Republican efforts to pass a smaller bill would only prolong the economy’s trek back to full employment. If everything goes as planned, the plan may be approved as early as March 15th, right after the special unemployment benefits program expires.
In the meantime, weak numbers on the US labor market do nothing but boost the plan approval. For example, the Unemployment Rate went from 6.7% in December to 6.3% in January but it was the only positive news. The Non-Farm Employment Change showed only 49K in January after being -227K the month before (it was revised downwards) and against the expected reading of 85K. The Average Hourly Earnings added only 0.2% m/m after expanding by 1.0% m/m and against the expected reading of +0.3% m/m.
The labor market tripped again, although the weekly data was looking quite stable. Most likely, the weak numbers resulted from the service sector, which just can’t get back to normal.
However, the current weakness of the labor market, confirmed by the statistics, is an ace in the hole for the White House. The USD doesn’t respond but it may be temporarily.