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EUR/USD Experienced Great Volatility on Upbeat US Data

January 4, 2019 by

The US dollar has shown two spikes against the euro today — one up and one down — as markets reacted to the positive fundamentals released in the United States. EUR/USD is currently bound to end the day near its starting point.

Nonfarm payrolls added 312k in December. This followed a growth by 176k in November (revised up from 155k) and was a much bigger gain than the median forecast of 179k. Average hourly earnings also went up in December — by 0.4% after rising by 0.2% in November; the forecast change was at 0.3%. Surprisingly, the unemployment rate went up from 3.7% to 3.9%. (Event A on the chart.)

The final revision of Markit services PMI for December show an unexpected uptick — from 53.4 to 54.4. Traders expected a much smaller change — to 53.5. (Event B on the chart.)

US crude oil inventories remained almost unchanged during the week ending December 28 — for the second week in a row. They were expected to decline by 2.8 million barrels. Total motor gasoline inventories meanwhile added 6.9 million barrels after growing by 3 million barrels a week earlier. (Event C on the chart.)

EUR/USD as of 2019-01-04

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