Market news on 7.12

1. Against the background of the decline in the US dollar, the EUR/USD pair recovered slightly in the area of 1.0775–80.
   - The euro/dollar pair rose slightly from a multi-week low reached earlier on Thursday.
   - Players are encouraged to take profits on the dollar due to expectations of a Fed rate cut and a significant increase in demand for the Japanese yen.
   -Reducing risk appetite can limit monetary losses.
   
   EUR/USD attracted buyers at 1.0750, breaking a six-day downtrend to hit its lowest level since November 14 earlier on Thursday. With the United States Dollar (USD) falling, the price is currently experiencing slight gains on the day, trading between 1.0775 and 1.0780, although there are no signs of active price growth.
   
   The US dollar's decline from Wednesday's two-week high could be explained by some profit-taking in the context of the Federal Reserve's dovish outlook. The sharp increase in demand for the Japanese yen (JPY) is another reason for the fall in the dollar. At the same time, a general decline in stock market sentiment will help stem losses in the safe-haven dollar and limit any significant strength in the EUR/USD pair.
   
   Additionally, traders may be discouraged from making new bullish bets on the single currency due to the recent dovish tone expressed by European Central Bank (ECB) officials. Isabelle Schnabel, a board member of the European Central Bank, said on Tuesday that a sharp fall in inflation and rising expectations for rate cuts could mean the central bank will not raise rates again. In fact, markets are already forecasting a possible 142 basis point cut in headline interest rates in 2024, which should limit gains in EUR/USD.
   
   Economic data showed industrial production in Germany, the powerhouse of the eurozone economy, fell 0.4% in October, compared with estimates of 0.2% and output of -1.3% in September. While most attention will remain on Friday's NFP report, market investors are now awaiting the release of weekly data on initial jobless claims in the US. However, the above mixed fundamental backdrop suggests it should wait for more buying before concluding that the recent rapid decline from the 1.1015 area - the more than three-month peak set in November - has already been fully exploited.
2. German industrial production fell 0.4% month on month in October, compared with forecasts for growth of 0.2%.
   German industrial production continued to decline in October, according to key statistics released on Thursday.
   
   According to the federal statistical office Destatis, industrial production by eurozone locomotives fell by 0.4% over the month compared to forecasts of +0.2% and a total of -1.3% in September. The data is adjusted to take into account calendar and seasonal deviations.
   
   German industrial production fell 3.5% year on year in October after falling 3.6% in September.
   
   Implications for the foreign exchange market:
   
   In response to dismal German industrial production statistics, the single currency remained unchanged. At the time of writing, the currency pair is trading unchanged at 1.0764.
3. While markets are waiting for data on new jobs, the US dollar remains in demand.
   
   The U.S. Dollar Index (USD) continued its upward trend on Wednesday, peaking above 104.00 for the first time in nearly three weeks. On Thursday, the US will publish weekly statistics on initial jobless claims, as well as data on job losses from Challenger for November. Earlier today Eurostat will publish the latest data on employment and GDP growth in the third quarter.
   
   US data on Wednesday showed further signs of cooling in the labor market, but market caution kept the dollar strong for the third day in a row. ADP job changes totaled 103,000 in November, below the market estimate of 130,000. Labor costs fell 1.2% in the third quarter, beating analysts' estimates by 0.9%. Wall Street's major indexes ended the day lower, while US stock index futures failed to gain traction during today's Asian trading session.

Risk Warning: Please note that the possibility of making a profit is inextricably linked with the risk of losses. Neomarkets Group Ltd cautions that the information contained in this material should not be construed as a recommendation to engage in trading operations.