| The main event of the day yesterday was the central banks release of their key interest rates. The European Central Bank and the Bank of England kept their rates unchanged, however volatility was high especially during and after ECB President’s Draghi press conference after the release.The Euro benefited from Draghi’s optimistic comments over the developments in recent weeks and the European currency climbed radically higher to hit 1.3870. Draghi acknowledged the improvements in money markets during the last month, upgraded the 2014 GDP forecast marginally higher and discussed the developments in inflation during the recent period. Even though he mentioned that risks to economic growth remain present, mentioning the emerging markets currencies’ sell-off and the geopolitical risk due to the Russia-Ukraine tensions, the general feel of this tone was a positive one and that led the Euro to a new high for 2014.Contrary to Draghi’s press conference, the Bank of England doesn’t host a similar event after the release of their key interest rate and only a short statement comes along with the release. We will have to wait for the meeting’s minutes that will be made public over the next weeks to listen to what the committee members have to say about UK’s growth outlook. The Pound however was on the rise yesterday reaching 1.6770 and showing signs that investors are willing to bet on the Pound’s strength but are unwilling to commit before the release of the jobs report from the US later today.
The US Dollar was lower yesterday against the Euro and the Pound as we discussed above, however the main event of the week for the US currency is the Non-Farm Payrolls jobs report scheduled for today. The release of the report will be a major event for currency markets as with 2 consecutive months of sluggish growth in the US jobs market the stakes are high and a discouraging reading will damage the recent uptrend in risk-correlated currencies like the Euro and the Pound. There are a number of reasons that suggest that jobs growth will again be sub-par and the number to focus on here is the 100-115k jobs added. Any printing below the 100k barrier will be another significant setback for the US economy and investors will probably react be selling Euros and Pounds for a safer heaven like the Dollar. The way that the report will print today is also very important for the Fed as well as a negative reading will cast further doubts over their tapering agenda. US jobs growth and unemployment levelThe Economic Calendar today holds the most closely monitored release of the month as the US will announce its Non-Farm Payrolls numbers and its Unemployment Rate level. As we discussed above, the report is a signification indication of economic growth in the US as it gauges how many people get to work every month and several other related factors like the Average Hourly Earnings. Economic Calendar
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