{"id":6230,"date":"2019-10-02T11:00:03","date_gmt":"2019-10-02T15:00:03","guid":{"rendered":"https:\/\/currencylive.com\/?p=6230"},"modified":"2019-10-02T10:34:25","modified_gmt":"2019-10-02T14:34:25","slug":"101204-eur-usd-pair-advances-after-us-private-sector-hiring-disappoints","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/101204-eur-usd-pair-advances-after-us-private-sector-hiring-disappoints\/","title":{"rendered":"EUR\/USD: Pair Advances After US Private Sector Hiring Disappoints"},"content":{"rendered":"<p>The euro has clawed back earlier losses versus the dollar and is pushing higher as US recession fears grow. The euro US dollar exchange rate rebounded off a nadir of US$1.0904 before extending to US$1.0950.<\/p>\n<p>The euro is advancing on Wednesday even as the World Trade Organization (WTO) will rule on the level of punitive tariffs that the US can apply to a range of European goods. This comes following a ruling by the WTO that the EU failed to withdraw billions of dollars in illegal subsidies to Airbus for the development and launch of the A380 superjumbo and the A350.<\/p>\n<p>The US is looking to impose tariffs in the region of $11 billion on European goods in a move that would damage already very fragile EU \u2014 US trade relations. Data earlier this week has shown that the eurozone economy is potentially heading towards a recession. Any trade tariffs could only make the situation worse. This would be bad news for the euro.<\/p>\n<p>The euro could continue to climb higher tomorrow as euro investors look ahead to eurozone retail sales data. Analysts are predicting that retail sales increased 0.3% month on month in August, up from a -0.6% decline the previous month. Annually analysts are forecasting a 2% year on year increase, down from 2.2% in July. Investors will be watching closely to see whether the slump in the eurozone manufacturing sector is spilling over into the consumer sector.<\/p>\n<h3><strong>Dollar Drops As Private Sector Hiring Falls<\/strong><\/h3>\n<p>The dollar fell sharply again in early trade following the release of disappointing ADP private payroll data. The report showed that private payrolls increased by 135,000 in September, whilst August\u2019s reading was revised lower by 38,000 t0 157,000. The monthly average is now at 145,000, down from 214,000 a year earlier. The figures clearly indicate that the pace of hiring has slowed; demand for hiring has weakened.<\/p>\n<p>Weaker hiring figures combined with yesterday\u2019s dismal manufacturing numbers are unnerving investors. Fears are growing that the US could be heading towards a recession. Investors are starting to reassess the probability of the Fed hiking cutting rates again this year which is pulling the dollar lower.<\/p>\n<p>&nbsp;<\/p>\n<table width=\"602\">\n<tbody>\n<tr>\n<td><strong>Why do interest rate cuts drag on a currency\u2019s value?<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Interest rates are key to understanding exchange rate movements. Those who have large sums of money to invest want the highest return on their investments. Lower interest rate environments tend to offer lower yields. So, if the interest rate or at least the interest rate expectation of a country is relatively lower compared to another, then foreign investors look to pull their capital out and invest elsewhere. Large corporations and investors sell out of local currency to invest elsewhere. More local currency is available\u00a0 as the demand of that currency declines, dragging the value lower.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p>Investors will now look ahead to the US service sector figures. The service sector accounts of over 77% of economic activity and so is the dominant sector. Analysts are expecting a decline in activity to 55 in September from 56.4. Additional weakness could send the dollar lower.<\/p>\n<p>&nbsp;<\/p>\n<table width=\"602\">\n<tbody>\n<tr>\n<td><strong>What do these figures mean?<\/strong><\/td>\n<\/tr>\n<tr>\n<td>When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.<\/p>\n<p>For example, it could be written:<\/p>\n<p><em>1 EUR = 1.12829 USD<\/em><\/p>\n<p>Here, \u20ac1 is equivalent to approximately $1.13. This specifically measures the euro\u2019s worth against the dollar. If the U.S. dollar amount increases in this pairing, it\u2019s positive for the euro.<\/p>\n<p>Or, if you were looking at it the other way around:<\/p>\n<p><em>1 USD = 0.88789 EUR<\/em><\/p>\n<p>In this example, $1 is equivalent to approximately \u20ac0.89. This measures the U.S. dollar\u2019s worth versus the euro. If the euro number gets larger, it\u2019s good news for the dollar.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<h6><em>This publication is provided as general information only and is not intended as an exhaustive treatment of its subject. TransferWise Inc. and its affiliates (&#8220;we&#8221; or &#8220;us&#8221;) expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of this publication, and you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from us.\u00a0 We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"<p>The euro has clawed back earlier losses versus the dollar and is pushing higher as US recession fears grow. The euro US dollar exchange rate rebounded off a nadir of US$1.0904 before extending to US$1.0950. The euro is advancing on Wednesday even as the World Trade Organization (WTO) will rule on the level of punitive [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":5623,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1380,1381],"tags":[1581,1395,1393,1457,1586,1414,1430,1585,1397,1398,1584],"class_list":{"0":"post-6230","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-eur","8":"category-usd","9":"tag-adp","10":"tag-eur","11":"tag-euro","12":"tag-manufacturing","13":"tag-payrolls","14":"tag-recession","15":"tag-retail-sales","16":"tag-trae-tarif","17":"tag-us-dollar","18":"tag-usd","19":"tag-wto"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>EUR\/USD: Pair Advances After US Private Sector Hiring Disappoints - 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