At the end of another October week, EURUSD stopped falling but it looks more like a pause than a reversal.
The major currency pair stopped falling on Friday. The current quote for the instrument is 1.1706.
Market players got once again interested in “safe haven” assets and they have several reasons for that. First of all, investors are very nervous in anticipation of corporate reports because there might be more problems in banks and manufacturers – and these concerns have grounds. Secondly, everyday countries introduce more and more restrictions because of the second wave of COVID-19, which may hurt businesses way too much. If consumers stay home, global economies will suffer a lot. Taken together, these factors lead to the increased demand for the USD as a “safe haven” asset.
The statistics published yesterday showed that the US labor market has been experiencing difficulties for the second consecutive week. The Unemployment Claims last week was 898K after being 845K the week before and against the expected reading of 810K.
Conceivably, the service industry activity is going down – it would happen anyway under normal circumstances due to the seasonal factor but this year this factor is influenced by the coronavirus pandemic.
Later today, the USA is scheduled to report on the Industrial Production, which is expected to add 0.6% m/m in September after expanding by 0.4% m/m the month before. The Capacity Utilization Rate may also improve – it is expected to show 72.1% in September after being 71.4% in the previous month. The stronger the statistics, the better for the USD.