EUR/USD At 5-Month High

Investors are nervously awaiting the U.S. employment figures for November following the currency pair last night caught a peak of 1.0539, the highest after June 29.

Recall that the Euro-Dollar’s upgrade this week is largely defined by Fed boss Jerome Powell’s speech endorsing the prospect of a quieter Fed rate hike in the next FOMC meeting.

The market was already greatly expecting a 50 bps rate increase (from 75 bps in the prior four meetings) before Powell’s speech. However, the market confidence that the Fed is readying to “pivot” still had support, which weighed on the dollar, to the use of EUR/USD.

Christine Lagarde’s remarks last night did not prevent the rally, as the ECB President stated that uncertainties complicate monetary policy and that central banks must resume work to bring inflation back to target.

NFP Report Could Be Essential For EUR/USD Today

For today, the future of the EUR/USD will largely rely on the NFP report on U.S. job opening in November. The consensus projection calls for job creation to delay to 200k from 261k in the prior month, with the unemployment rate maintaining steady at 3.7% and average hourly earnings predicted to increase to 4.6% every year from 4.7% the prior month. As for the possible reaction of the Euro-Dollar to these figures, bad news should, in principle, support expectations of a slowdown in Fed rate hikes, which would be harmful to the dollar and positive for EUR/USD.

Contrarily, a stronger-than-expected NFP report could boost the dollar, although this is doubtful enough to challenge the possibility of a Fed pivot in December.