The pair rebounded as split among Greek policymakers regarding a referendum on receiving an EU/IMF bailout and expectations of government collapse eased default concerns, thereby damping demand on the dollar as a favorite safe haven.
With the current split that will be mainly changed from accepting the bailout to staying in the euro area or not, hopes increased that the Greek government might fall in tomorrow’s Parliament vote which mean that the referendum will probably be postponed.
Greek PM assured that the country’s membership in the euro area was never in question.
This managed to offset the impact of the ECB decision to cut interest rate by 25 basis points which boosted the dollar before it retreated. Some investors interpreted the cut positively as it will bolster the economy amid the current anemic recovery.
Moreover, data from the U.K. showed decline in services to 51.3 in Oct. from 52.9, according to the PMI gauge.
In the U.S., ISM non-manufacturing composite for the U.S. slipped to 52.9 in Oct. from 53.0 in Sep., yet factory orders showed 0.3% advance in Sep. from the revised 0.1%.
On Friday, amid the absence of data from theU.K., the main focus of the week which is the awaited non-farm payrolls report from the United States will be due at 12:30 GMT. Expectations refer that change in non farm payrolls will retreat to 100,000 in October, lower than the previous 103,000 while unemployment will stagnate at 9.1%.
The awaited non-farm report will provide clues about the labor market and therefore is predicted to impact the pair’s movements.
On Tuesday, the Fed lowered growth forecasts and raised estimates for unemployment, whilst revealing that purchasing mortgage-backed securities is a valid option for the Fed to boost the slackening recovery.
