GBP/USD: Brexit Developments and US Jobs Report Could Make For A Volatile Session
  • Euro (EUR) extends losses for second day
  • German industrial production decelerates
  • US Dollar (USD)rises on stimulus optimism
  • US NFP to show job gains slowing

The Euro US Dollar (EUR/USD) exchange rate is extending losses for a second straight session on Friday. The pair settled lower on Thursday -0.4% at US$1.2270 after three days of gains. At 09:15 UTC, EUR/USD trades -0.35% at US$1.2226. The pair is on track to gain 0.7% across the week.

The Euro remains pressured versus the greenback for a second straight day ahead of the US non-farm payrolls and as US president Joe Biden’s economic plans are expected to be released.

German industrial production decelerates for a second straight day. German industrial production rose in November, but at a significantly slower pace than the previous month.

Industrial output rose 0.9% month on month in November, whilst this was down from 3.4% increase in October, it was above analysts’ forecasts of 0.4%.

Looking ahead Eurozone unemployment data is expected to reach 8.5% in November, up from 8.4% in the previous month

The US Dollar rebounded in the previous session and continues to build on those gains, supported by jumping US treasury leads amid expectations of further US fiscal stimulus after the Democrats won a majority in the Senate.

Attention will now turn to the US non-farm payroll. The broad expectation is that the closely watched US Labour Department report will show that hiring slowed in December as tighter covid restrictions continued to hit businesses.

Expectations are for just 71,000 new jobs to have been created in November down significantly from 245,000 in November. However, the unemployment rate is expected to once again tick lower to 6.7%. Average hourly earnings are also expected to have increased by 0.2% month on month.

The lead indicators have broadly pointed to a softer than forecast reading with Challenger Job cuts, initial jobless claims and ISM services PMI employment subcomponent pointing to a disappointing read.