The Euro started growing. Overview for 05.11.2020

EURUSD reversed to the upside; the “greenback” may be stressed because of the advantage in favor of Biden. 

The major currency pair reversed and right now is slowly rising after several trading sessions of decline. The current quote for the instrument is 1.1737.

Results of the presidential elections in the USA haven’t been officially announced as the votes are still being counted. In several states, candidates are winning with a very close vote and that’s a great risk for the final result. In this case, the losing candidate may sue its opponent and the entire country will have to watch a new episode of the comedy-drama. 

So far, one can be sure that there will be a split in the Congress no matter who wins the elections. Initially, the Republicans were supposed to keep the majority in the Senate, thus being able to stand against any increases in the amount of money to be spent on economic support. The country’s economy does need this money – without them, the recovery will be non-systemic and much slower. 

Because of all this election hype, the labor market news went to the back burner. As usual, the first week of the month was full of it. Yesterday, the ADP Non-Farm Employment Change report for October was published and it was rather alarming. 

The indicator showed 365K, which is much less than the expected reading of 600K. The components of the report show that almost all jobs (348K) that were created were in the service-providing sector. It means that the economy may lose them by January due to seasonal factors, and that’s a serious problem.

There is no correlation between the ADP and NFP reports but the former one still can provide a good insight into what is going on in the sector.