· Euro Holds Its Breath Ahead of Non-Farm Payrolls
· Strong Chicago PMI Survey Boosts Whisper NFP Number
· Yen Traders Eye Tankan Survey
EURUSD
The euro brought forth some minor excitement after the surprising rise in US jobless claims, but the move quickly reversed following a better than expected Chicago PMI report. Unfortunately for traders, this week has really just been periphery action ahead of this Friday's Non-Farm payrolls release. The latest string of Eurozone economic data was exceptionally weak which has hampered any possibility of a euro recovery today. Both the unemployment rates in France and Germany ticked higher while overall confidence in the region deteriorated. With weak growth and reduced confidence following the revision of the Stability and Growth Pact, confidence in the outlook for the Eurozone economy and single currency has fallen significantly. As such, so has reserve diversification talk for the moment. Yet the forecast for annualized Eurozone inflation was notched higher from 2.0% to 2.1%. This highlights the difficulties that the ECB is faced with - that is rising inflationary pressures in the face of deteriorating growth. As such, do not expect the ECB to raise rates anytime soon. The growing interest rate differential will, for the time being lend strength to the dollar. However, short term price action all depends on payrolls.