The US dollar was unable to continue its upward movement in tandem with the euro and the pound after the release of reports indicating a slight slowdown in the labor market and a growing deficit in foreign trade.
Despite the best efforts of US President Donald Trump, there is no way to cope with the growing deficit of foreign trade.
According to the report of the US Department of Commerce, the US foreign trade deficit in December 2018 increased by 19% compared with the previous month and amounted to 59.8 billion dollars. Economists had expected a trade deficit of $ 573 billion in December.
The number of jobs in the US private sector increased in February, but it turned out to be worse than economists' forecasts, and compared with January, the increase was almost half as much.
According to Automatic Data Processing Inc. and Moody's Analytics. The number of jobs in the US private sector increased by 183,000, as companies hired employees less actively than in January. Economists had forecast an increase in the number of jobs in the private sector by 200,000.
In January of this year, the number of jobs increased by 300,000, whereas previously it was reported about 213,000.
As for the technical picture, it remained unchanged. Much today will depend on the statements of the European Central Bank after the announcement of the decision on interest rates. Most likely, the regulator will announce the launch of the LTRO refinancing program, which, although temporarily, may weaken the position of the European currency.
An unsuccessful consolidation of EURUSD above the resistance of 1.1315 may lead to a new wave of reduction in risky assets with the update of 1.1280 and 1.1235 lows. If the ECB's statements are more firm with a focus on raising interest rates this year, the demand for a trading instrument may increase, and a break of 1.1315 will be a good signal to buy European currencies in order to update 1.1370 and 1.14160.
The Canadian dollar collapsed against the US dollar after the Bank of Canada left the one-day interest rate target unchanged at 1.75%, announcing increased uncertainty about the timing of future rate increases.
The regulator also said that it will take time to assess how long economic growth will remain below potential and how inflation will change. This again suggests that interest rates will not be raised in the near future.
The weak report on labor productivity also put pressure on the Canadian dollar. According to the data, labor productivity in Canada in the 4th quarter of 2018 decreased by 0.4% after growth. Economists had expected a decline in productivity of 0.3%.
Canada's foreign trade deficit increased again in December due to lower energy exports. According to the data, the trade deficit of goods in December amounted to 4.59 billion Canadian dollars, while economists had expected the deficit to be 2.06 billion Canadian dollars.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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