EUR/USD Fundamental Forecast – September 2, 2016

The EUR/USD dipped 6 points today as Eurozone unemployment climbed and the US dollar continued to hold gains.  Eurozone PMI data also printed lower than expected at 51.7. The pair is trading near the bottom of its range as the new month unfolds. The euro is trading at 1.1151.
ADP data on Wednesday saw the U.S economy add other +177k private sector jobs last month, proof that job creation remains strong, with most industries and companies of all sizes adding solidly to their payrolls. What does it mean for Friday's non-farm payrolls report and the Fed's September meeting?
The message from Jackson Hole last week was that the Fed is very keen to raise rates. Investors are going to have to seriously consider the possibility of a September hike if tomorrows headline surprises to the upside. If the payroll numbers happen to be strong (+185k), September will immediately become a 'live' meeting, if so, dealers should expect a "wobble" in risk markets.
Be forewarned, over the past five years, the August payrolls figure has missed expectations each time. A miss tomorrow would be entirely consistent with recent trends. So either way, good or bad print, we should be expecting some unexplained prices moves amongst the various asset classes due to positions.

Economic Calendar