NFP could boost EUR/USD to 1.20 – Danske Bank

Head of FI Research at Danske Bank Arne Rasmussen, expects the pair could move higher towards the 1.20 handle on the NFP event.

Key Quotes

“Non-farm payrolls data completely dominates today’s trading session. Any surprises relative to consensus expectations on employment (180k) and earnings (0.3/2.4% mom/yoy) have potential to send EUR/USD towards 1.20 if seen as weak or prompt a correction if strong”.

“Looking at price action after the last couple of NFPs the key market mover within the report has been wage growth – not employment growth”.

“This makes perfect sense, in our view. A drop in earnings growth to 2.4% will not make it easier for the Fed and could fuel further USD selling. It should be kept in mind though that with the US surprise index now at stretched negative levels, the threshold for further macro disappointments in the US is higher and thus the room for macro driven USD depreciation lower”.