European and North American names lifted EURUSD to intraday highs before late-day profit-taking ensued. The pair got a lift after it was reported that ADP April private sector jobs were down a less-than-expected 491,000, much lower than forecast and lower than the downwardly revised 708,000 figure for March.
U.S. April non-farm payrolls report will be released on Friday and forecasts are calling for around a 580,000 to 610,000 decline in jobs in addition to the 663,000 loss already announced for March. Federal Reserve Chairman Bernanke reported he expects the unemployment rate to top out at a 9% handle even after the U.S. economic recovery has started.
The big item on traders’ radar today is the release of U.S. banks’ stress tests results. There is widespreads talk that around ten of the nineteen largest banks – including Citigroup, Bank of America, and Wells Fargo – will be asked to raise additional capital to support their financial positions. There is talk that Bank of America may need to raise as much as US$ 34 billion in additional capital.
The European Central Bank is expected to announce that it is reducing its main refinancing rate by 25bps to 1.00% today. Some dealers believe the ECB may announce quantitative easing measures. Other data released today saw EMU-16 April services PMI improve to 43.8 from 40.9 in March.
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