The key issue on FOMC agenda were additional economic stimulus measures, since its growth rate slowed down and there are signs for a downturn. Risk aversion is observed in the market, obviously suggesting the market players to prefer reserve currencies – Swiss franc or the yen – against the dollar. At the same time, the European currency is looking even less attractive then the dollar, which can result in further eur/usd drop and going away from the risky assets.
As for the macro statistics, we should firstly pay attention to PMI at the beginning of the European session. This leading business activity indicator is anticipated without any changes – at 55.0. The euro’s short-term rise/fall is likely to initiate ascending/descending to the expected reading. ISM indicator will be released on the American session with business activity level expected to decrease from 55.50 to 53.0. Before ISM one should pay attention to ADP employment change, which growth rates are likely to decrease from 42 to 13, proving economic slowdown and anticipating negative information from nonfarm on Friday.
Analysis prepared by:
Maxim Dmitrievsky
Forex4you analyst