The Eurodollar gained ground against the greenback yesterday despite the release of lower than anticipated Italian industrial production data for January. Notably, the US job openings at the end of January stood at a healthy level. Still, the market sold the US dollar and bought the euro as Ukrainian President Volodymyr Zelensky announced that he no longer intends to join NATO. The market expects further cooling in the next round of negotiations between Russia and Ukraine. Overall, the EUR/USD pair rallied from a low of 1.0950 to a high of 1.1090 in the last 24 hours.
According to the data published by the Italian National Institute of Statistics, the country’s industrial production index declined 3.0% m-o-m in January, following a contraction of 1.10% in the prior month and worse than the 0.60% decrease anticipated by economists. Correspondingly, the index stood at 101.40.
Also, the industrial production index fell by 0.50% in the three months ended January 2022, compared with the previous three months.
Notably, the non-seasonally adjusted industrial production index rose by 0.40% y-o-y in January 2022.
Furthermore, the calendar-adjusted industrial production index declined 2.60% y-o-y in January 2022. While pharmaceutical, petroleum, and chemical products contributed positively on a calendar-adjusted basis, mining and quarrying, electrical equipment, and non-electric domestic appliances contributed negatively.
According to Job Openings and Labor Turnover Survey (JOLTS) data published by the Bureau of Labor Statistics, the number of job openings remained almost unaltered at 11.26 million by the end of January, compared with 11.45 million openings in the prior month. The reported figure surpassed forecasts calling for 10.96 million job openings. The rate of job openings stood unchanged at 7% in January.
Accommodation and food services lost 288,000 jobs. Likewise, transportation, warehousing, and utilities reported a decrease of 132,000 jobs. The federal government posted a decline of 60,000 jobs. However, durable goods manufacturing posted an increase of 85,000 jobs.
Hires and total separations stood almost unchanged at 6.50 million and 6.10 million, respectively. The hires rate also stood unaltered at 4.30%.
In the case of separations, the quits rate fell to 2.80%. The layoffs and discharges rate was unaltered at 0.90%.
According to the data published by the Energy Information Administration, crude oil inventories fell by 1.90 million barrels in the week ended March 4, 2022, following a decline of 2.60 million barrels in the earlier week and higher than the 1.10 million barrels decrease anticipated by economists. Excluding strategic reserves, the US crude oil inventories stood at 411.60 million barrels, almost 13% lower than five year average for the reported period.
Furthermore, the country’s crude oil refinery inputs averaged 15.40 million barrels per day during the week ended March 4, 2022, reflecting a drop of 21,000 barrels per day from the earlier week’s average. The operating capacity of refineries was 89.30%. Over the last four weeks, crude imports averaged roughly 6.20 million barrels per day, 10.10% higher than the level recorded in a similar period last year.
The upbeat US economic data coupled with a slight easing of tensions between Ukraine and Russia is expected to keep the greenback range-bound against the Eurodollar in the short term.
The historical price chart indicates that the EUR/USD pair is rising after testing the support at 1.0850. The next resistance is anticipated only near 1.1130. Additionally, the currency pair is trading above its 50-day moving average, while the stochastics indicator is in the bullish zone. Therefore, we are anticipating the currency pair to remain in an uptrend in the short term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
