EUR / USD finally gained ground after the Fed’s dovish turn. September kicks off with a complete build-up of all-important non-farm payrolls, with European developments such as inflation – and coronavirus numbers – also of great interest, reports FXStreet analyst Yohay Elam.
“The increase in COVID-19 cases in the euro area has not translated into pressure on health systems, nor in deaths. However, there is a disconnect between infections and deaths. Some countries are cautiously returning to school in early September and any deterioration – especially an outbreak in one school – could trigger setbacks and weigh on the euro.
“After the Fed changed its stance on inflation, the preliminary Eurozone Consumer Price Index data for August is interesting. Headline inflation and core CPI are expected to decline but remain within well-known ranges. A fall in core inflation to less than 1% would be a source of concern for the European Central Bank. ”
“German retail sales and factory orders are both expected to grow, but at different rates. Consumers are somewhat reluctant to go to restaurants and shop outside. Investors will want to see how fast or slowly the recovery unfolds. “
Will the number of COVID-19 deaths in the United States start to decline? The improvement in the number of cases is not reflected in mortality, but could occur in early September. Without it, worries about the lingering slowness could drag the dollar down. ”
“The economic calendar is busy, culminating with Friday’s all-important non-farm payroll report for August. Investors want to see if the end of the special fiscal stimulus at the end of July – and the current coronavirus crisis – caused the recovery to slow down. A disappointing jobs report could hit stocks and prompt lawmakers to inject more budget support. The $ 600 / week federal unemployment insurance supplement expired at the end of July and is weighing on the world’s largest economy. However, the calculation day can wait until later in September. “