Jan 03, 2024

With German and US data released, EURUSD will get some attention from traders on Wednesday. 

EURUSD-–-4H-Chart

EURUSD – 4H Chart 

EURUSD jumped to near 1.15 but has since slumped to 1.0950. Support will come in ahead of the 1.09 level. 

Unemployment data will be released by the German labour office, with markets expecting an improvement of 2,000 jobs in the unemployment release. That will come out at 16:55 HKT. Traders expect the country’s unemployment rate to remain at 5.9%. That will be followed by the latest ISM manufacturing rate from the US at 23:00 HKT. 

The US manufacturing sector is expected to produce a reading of 47.1, up from 46.7 in the previous month. That is still lower than the 50 level, which marks expansion. 

The Federal Reserve will be back on the agenda at 3:00 am HKT on the 4th, with FOMC minutes likely to support the rate cut plans of the US central bank. Further German data will be released at 9 pm HKT, with inflation expected to dip from last month’s 3.2%. Like the US, that is close to the 2% central bank target level. Any deviation could see the recent euro rally pause. However, recession pressures are unlikely to produce a higher number of prices. 

Europe’s economy could continue to struggle in 2024 without rate cuts. However, some analysts are also expecting the US economy to slow down. The American Enterprise Institute was sounding the alarm about commercial real estate woes in the country. 

Vacancy rates at an all-time high and prices down 22% from 2022 are issues for the sector. Commercial property owners must also roll over $500 billion in loans next year at higher interest rates. With an upcoming election in November, that is another reason why the Fed is making a sharp pivot on its rate hike strategy.

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