© Dukascopy Bank SA
The single European currency started the previous week at the 1.057 level but managed to gain as much as 500 pips at the end of the week. Meanwhile, only 28% of traders expected such a development to take place. In the beginning of the week, the Greenback extended gains to fresh eight-month highs against the other major currencies on Wednesday, as the release of strong US jobs data added to expectations for a December rate hike by the Federal Reserve. The US nonfarm payrolls grew 211.000 in November, and revisions added a total of 35.000 jobs to the September and October tallies. The unemployment rate, in turn, was flat at 5%. Nevertheless, the Euro soared against the Dollar on Thursday, since the European Central Bank adjusted its current QE programme, when it announced that the programme will now last until March 2017. The single European currency skyrocketed on these news, as markets have been positioned for much more aggressive easing and therefore traders were exiting their Euro shorts on these disappointing news for Euro bears. Earlier in the day, the German services PMI improved from 54.5 to 55.6 in November, while the Euro zone services gauge only marginally rose from 54.1 to 54.2 and fell short of expectations of a 54.6 print.
During December 7-11 time period the Dukascopy Community members again assume this currency pair to decline, as more than 66% of all votes are bearish. Concerning traders' opinions: "Last week's the ECB meeting disappointed the market with less than expected stimulus, and the result was a rally in the Euro. Nevertheless, the fact remains that the FED is expected to hike next week which sets up USD bulls with attractive levels to short the pair this week." claims Jignesh. Meanwhile, on Thursday, the US is to release the weekly report on initial jobless claims, while the next day, the reports on retail sales and producer price inflation is going to be announced.
© Dukascopy Bank SA