EUR/USD: Nothing new on the table, investors remain hesitant near a 1.1050
|The single European currency remains close to the 1.1050 level in an extremely narrow trading range after a quiet Monday where investors avoided any bets in the wake of the US Labor Day holiday.
Market's picture shows no significant differences with interest remaining focused on the prospect of a rate cut by Fed on September 18.
At the moment the odds are stacked on a 25 basis point cut in key rates with US jobs data later this week expected with great interest as a potential big disappointment will boost bets for a 50 basis point cut.
Let's not forget that in several statements Fed's President has sent the message that further cooling in the labor sector is not desirable and he could use interest rate cuts as a weapon to stop the increase in the unemployment rate and by extension to prevent a possible recession in US economy.
The possibility of an increase of 50 basis points is not the main scenario and if it happens it will be a shock event that will affect the US dollar very negatively, but is something that I would not adopt especially if the data until Friday does not disappoint.
On today's agenda, the research on the path of manufacturing sector in the United States stands out, which is often a harbinger of the development path of the American economy.
With no major surprises, investors are expected to remain cautious as several major macroeconomic figures are expected over the course of the week, culminating in new jobs and the unemployment rate on Friday.
After locking the profits in favor of the US dollar from 1,12 level I prefer to stay on hold.
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