03, July 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

Relatively high values of the PMI manufacturing activity in the euro area Monday pushed the euro up opposite the grim picture of China. The final China PMI index in June was 48.2. This is the lowest value of the index for the first nine months, and it has also proved a bit below the prior value.

PMI value above 50 indicates a growth in manufacturing activity, below the 50 - a falling of it. European indexes have shown a more favorable picture. The European single currency grew more than a cent against the U.S. dollar, when the PMI index for the manufacturing sector in Spain in June stabilized after 25 consecutive months of falling, reaching 50.0 against 48.1 in May.

But the real test for the dollar is non farm payrolls of the US for Friday. Analysts predict 155,000 extra vacancies to be added in June, while in May the number was 175,000.

This report is particularly important in view of the fact that investors will be looking for further guidance on the possible collapse incentive programs of the Federal Reserve.

Investors also await statements on monetary policy by the Reserve Bank of Australia on Tuesday and the Bank of England and the European Central Bank on Thursday. Bank of England meeting on Thursday will be the first under new head Mark Carney. The ECB meeting is to be followed by a press conference by the Bank President Mario Draghi on Thursday.