EUR/USD – it looks like we have 2-way risk again…

Last Friday’s employment report from the US was a lot weaker than market consensus with only 126,000 jobs created. Up till that point, it looked as though any rally in EUR/USD was a selling opportunity for the inevitable push towards parity – a level not seen for many years. The weak employment report caused EUR/USD to briefly spike above 1.10 and some market commentators appear to think that the Fed will now delay a rate hike until the back-end of the year, which may give a softer tone to the US Dollar.

Is the strong dollar causing a drag on US economic performance ? That’s difficult to say, but the main trading partners of the US are all still in easing mode and now that a US rate hike seems to have been kicked down the road, there should be good 2-way interest around the 1.10 level.

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