The Euro fails to capitalize on positive German factory output as risk aversion and a tech-sector rout bolster the US Dollar ahead of key labor market data.
EUR/USD has fallen for a second day to around 1.1180 from Thursday's highs near 1.1270, as risk aversion boosts the safe-haven US Dollar. Even a better-than-expected German Industrial Production reading of 0.7% for September (consensus 0%) failed to lift the pair. Today's Eurozone Retail Sales and the October NFP report are the next catalysts.
The US Dollar is being bought as a safe haven during a tech-led equity sell-off, and the article notes the Euro was unable to take advantage of the 0.7% German Industrial Production beat.
Eurozone Retail Sales for September, expected to show a -0.1% decline, and the October US Nonfarm Payrolls report later on Friday, which could further support the USD if it follows recent strong labour data.
The US Dollar is drawing safe-haven demand from a tech-led equity sell-off driven by fears over AI sector regulation and data-centre cancellations. OCBC strategists call the environment of solid US growth, sticky inflation and further Fed tightening broadly USD supportive, and strong labour data (Jobless Claims, ADP, JOLTS) point to a possible NFP beat later Friday.
Risk aversion from a tech-led equity sell-off, plus an environment described by OCBC as broadly USD supportive: solid US growth, sticky inflation and a Fed on track for further tightening.
October's Nonfarm Payrolls report due later on Friday; recent labour data (lowest Jobless Claims in nearly four months, strong ADP employment, sharply higher JOLTS openings) suggest another beat would support the USD.
The Euro is trading lower for a second consecutive day, pressured by broad USD demand in risk-off conditions despite a positive German Industrial Production surprise of 0.7% versus 0% expected. Upcoming weak Eurozone Retail Sales (expected -0.1%) are flagged as unlikely to support the currency.
Risk aversion is favouring the safe-haven US Dollar, overwhelming the positive 0.7% September factory output reading, and Eurozone Retail Sales are expected to show a -0.1% decline.
A tech-led sell-off in equity markets is under way, with chipmaker shares plunging in the US and Asia on fears that the Democratic sweep in the United States will bring tougher regulation and cancellations of data-centre construction plans. This risk aversion is the main driver of current market positioning.
Investors fear that the Democratic sweep in the United States will result in tougher regulatory requests and cancellations in data-centre construction plans.
The Euro continues its two-day slide against the US Dollar, trading near 1.1180 despite a stronger-than-expected 0.7% rise in German industrial production. Market sentiment remains risk-off as a tech-led equity sell-off, fueled by fears of AI sector regulation, drives capital into the safe-haven Greenback ahead of today's critical US Nonfarm Payrolls report.
The Euro is being overshadowed by broad risk aversion in global equity markets, which is driving investors toward the safe-haven US Dollar regardless of localized positive economic indicators.
Investors are reacting to concerns that a Democratic sweep in the United States could lead to stricter regulatory oversight for the AI sector and potential cancellations of major data-center construction projects.