The Euro Plummeted By A Hundred Points.

On Friday, the focus of the market will turn to non farm employment data in the United States. If the performance is good, it may raise investor expectations of the Fed's earlier increase in interest rate hikes, which will push the dollar further stronger and lead to a lower level of the euro.

Europe Central Bank (ECB) President Delaki (Mario Draghi) said on Thursday (November 6th) at a news conference after the meeting that the central bank policymakers agreed to take further policy actions when necessary, and internal staff were preparing for possible action in the future. He reiterated that the risk of euro zone economic recovery is still biased. Before the European Central Bank announced that the benchmark interest rate will remain unchanged at 0.05%.

Delaki's speech opened a green light for investors to sell euros. The comments sparked the euro / dollar short term plunge by more than 100 points and hit a new low of more than two years 1.2383.

In late New York, the euro / dollar dropped 0.9% to 1.2375, hitting 1.2365 at the lowest level since August 2012. The US dollar index rose 0.7% late at 88.01, hitting 88.03 of the highest in June 2010. USD / JPY hit a seven year high of 115.49 and ended up 0.2%, at 114.89.

　　 The ECB's plan to buy assets is right. Balance sheet The impact will be enormous.

Delaki said that through the purchase of assets from the financial system, the scale of the European Central Bank's balance sheet will reach the level of March 2012, up to 3 trillion euros.

Analysts in Denmark's Danske Bank say this actually means that the size of the European Central Bank's balance sheet will increase by about 950 billion euros from its current level.

The disappointing survey of corporate growth in the euro zone, coupled with the unexpected decision by the BOJ last week to expand the already huge stimulus package, has increased the pressure on the ECB to further relax its policy in the euro area. The euro area is currently showing signs of deflation and weak growth.

"The market has not overworked the euro before Delaki's speech," said Vassili Serebriakov, strategist at BNP Paribas, Paris. But the tone of his speech is moderate enough to make investors eager to make the euro empty again. Last week, the euro's headline position was the largest in July 2012.

Dusk bank said the euro / dollar has room for further decline, and it is expected that the exchange rate will fall to 1.20. in the next six months.

State Street Global Advisors Inc. Collin Crownover, the head of foreign exchange management, said: "Delaki is trying to make the market ready for the QE that he is likely to expand. Although it may not be the scale, it is in terms of assets purchased, although the euro's decline is not very large from historical level, it has fallen considerably recently. I think the euro / dollar has gone down a bit, but there will be difficulties in reaching 1.20 aspects this year. "

Will the non farm help the US dollar go to a higher level?

The US Department of labor is scheduled to announce its October employment data at 21:30 on Friday, Beijing time. The median expected value of economists surveyed by the media showed that the number of non farm payrolls increased by 233 thousand in October, up from 248 thousand last month. In addition, the US unemployment rate in October was 5.9%.

Analysts pointed out that if the above estimate was confirmed on Friday, it would confirm the view of the Federal Reserve (FED), that is, the employment market will continue to develop in a comprehensive and benign direction. If the data is better than expected, the anticipation of the US Federal Reserve's interest rate hike ahead is expected to further increase, which will further support the US dollar.

On Wednesday, the number of ADP employment in the United States, known as "small non-agricultural", increased by 230 thousand in October, the largest increase since June this year, with an expected increase of 220 thousand people, and it has also been more than 200 thousand people in seven consecutive months.

In addition, the US Department of labor announced on Thursday that the number of unemployed Jin people at the beginning of last week dropped to 278 thousand people, better than the 285 thousand people predicted by the market, and also injected a shot in the arm for this non-agricultural data.

"We expect the number of non farm workers to increase by 220 thousand in October, and the unemployment rate will remain at 5.9%," said Cr DIT Agricole. Since September, the number of initial jobless claims in the United States has continued to decline, and the average of October has dropped to 281 thousand, down from 294 thousand in September. Such a downward trend is indicative of strong non-agricultural performance and the unemployment rate is expected to fall in the coming months.

　　 at present market The focus shifted to Friday's US non farm employment data.

The data released earlier this week decreased from 287 thousand to 278 thousand, which is still better than expected. Recent initial data and Wednesday's ADP employment data suggest that non-agricultural data will continue to perform well. This may also mean that the market may raise interest rates for the Fed ahead of schedule.

"On Thursday, the performance of the currency market seems to have begun to fulfil this expectation ahead of schedule," the agency wrote. Of course, the decline of euro and Canadian dollar to some extent needs to be attributed to the impact of risk events. Delaki's relaxed expectations were strong, and drove the euro down more than 100 points. In early trading, Canada's Ivey Purchasing Managers Index in October dropped sharply from 58.6 to 51.2, far below 57.5. In addition, the decline of other non US currencies may be more due to the rise in the US dollar. In any case, Friday's nonfarm data could be a bloody storm. "

Analysts believe that if the non-agricultural data is strong in October, it will push up the anticipation of the Fed's interest rate hike ahead of schedule, making the fed further deviate from the monetary policy of the Central Bank of Japan and the European Central Bank, thereby stimulating the US dollar to rise. Barclays Bank (Barclays) said that the US / Japan has strong new momentum at present. If the US does not farm well in October, the exchange rate is expected to explore the 117 major hurdle.

Shinichiro Kadota, Barclays Bank foreign exchange strategist, said on Thursday that the US dollar / yen rise has never stopped since the BoJ announced easing last Friday. Last Friday, the Bank of Japan unexpectedly decided to speed up the expansion of the basic currency to 80 trillion yen per year, while expanding the annual purchase scale of ETF and JREIT, and the ETF purchase volume will increase by 3 trillion yen per year.

Kadota pointed out that if non farm is better than expected on Friday, then the United States and Japan may explore the 117 mark. On the contrary, even if the data are not as good as expected, the US / Japanese decline will be limited in 112 places.

FuturePath Trading futures analyst Frank Lesh said: "any strong economic data in the US will encourage us dollar and suppress gold prices." Lesh stressed that because the current market has expressed very optimistic expectations for non-agricultural products in October, if the value exceeds 248 thousand in September, the price of gold will fall.

Bart Melek, chief commodity strategist at TD Securities, points out that the US data is a great danger to gold and silver, which means that prices may continue to hit a new low, while the US non farm sector is the shining "star data". It is estimated that if the non-agricultural sector exceeds 234 thousand people, or even close to 300 thousand, gold and silver will both fail and fall to the bottom.