The forecast of the euro against the US dollar on the EURUSD today 03/06/2020
The situation at the moment is composed very interesting. On the one hand, today can be expected to yield a positive labor market release in the US in February, as the leading indicators in the face of ADP and ISM showed good growth. Particularly strong growth was ISM employment index for the services sector, which is the core of the US economy. In 11 branches it was recorded employment growth and an increase in new orders and the decline in business activity was recorded in 5 sectors. For the dollar is positive, and the opportunity to demonstrate the strengthening of the last trading day. On the other hand, according to futures on a bet the Fed, which is traded on the stock exchange in Chicago CME Federal Reserve at its meeting on March 18 with a probability of 99% will reduce the rate by 50 basis points, bringing the rate to a range of 0.5-0.75%. Moreover, at the meeting of April 29, according to the data of the futures, the US Federal Reserve may again lower the rate to 0.25%. These expectations are negative for the buck and to reduce standby outweigh the ECB, which may be held on March 12 0.1%. Why is the situation so changed? Fed fears coronavirus? In my opinion, no. If coronavirus is very scary, but now must first reduce the ECB and the Bank of Korea, as in Italy and South Korea in the last two weeks there is a rapid spread of the virus. In this case, the two data of the Central Bank did not hold an emergency meeting and do not reduce rates. Even the ECB next week plans to reduce the rate of only 0.1%. Then what is the matter? There is a possibility that Donald Trump, who actively lobbied for rate cuts in the past two years, achieved his goal.
EURUSD recommendation: flat 1.1170 -1.1250.