Here is the EURUSD fundamental analysis after trade negotiation between the US-China has improved slightly as the US reduced tariff for some goods.
October 17, 2019, | AtoZ Markets – The trade negotiation between the US & China has improved slightly as the US reduced tariff for some goods towards China. On the other hand, the fear of recession is keeping the pressure on the Euro against the other currencies.
The French Governor Francois Villeroy de Galhau and The Dutch governor Klaas Knot both called for a review of the economic strategy of both EU & ECB to recommend the ECB to introduce a symmetric towards the inflation aim. They also pointed out that the governments could simplify the Stability and Growth Pact to the budget deficits.
EURUSD Fundamental Analysis
The labor market of the European Union is continuously going towards a down track. The unemployment rate of August has fallen to 7.4% from the July value of 7.5%, while the yearly value was down 0.6% points over the last year. The slowdown of economic growth is the major reason behind the weakness in the labor market.
The composite PMI has fallen to 51.4 in September from 51.7 in August. On the other hand, temporary employment has slowed sharply over the last year and currently indicating a sharp slowdown in total employment growth. This is the hardest challenge for the ECB to overcome.
Read More: EURUSD is going through uncertainty
Unemployment Rate of Eurozone
The EU economic summit will provide a further indication about the EU economic growth decisions this week.
In the US, the retail sales for the full quarter expanded to 6.0% on a yearly basis but were down modestly from the 7.7% growth in Q2. The monthly retail sales have fallen from 0.6% to -0.2% due to the fear of recession and the uncertainty about the trade war.
On the other hand, the slowdown in monthly average payroll gains decreased from 228K to +161k on a yearly basis is also pointing a slowdown of the economy. With the current job growth is indicating a weaker NFP for the coming period.
The Philly Fed manufacturing index will be published today and expected to decrease from 12.0 to 7.3. Besides this, monthly industrial Production is also expected to decrease from 0.6% to -0.1%.
Philly Fed Manufacturing Index
As of the current observation, there is a possibility of volatility in the EURUSD price due to the geopolitical uncertainty. Currently, the price is above the 1.10, a significant psychological and technical level. Any weaker than expected US data might push the price up.
Think we missed something? Let us know in the comments section below.