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Forex pairs in this Article » EUR/USD (London) - EUR/USD strengthened as European Commission president Jose Manuel Barroso speaks in Athens after meeting with Greek prime minister Antonis Samaras as Greece takes over the presidency of the EU this week. This rally came after better than expected ADP numbers strengthened the dollar.

Rose-tinted European Commission spectacles

Barosso was bullish on the European Union’s outlook, and that forecasted that Greece is set to emerge from recession this year. However, the European Commission president stressed that Greece needs to keep up reforms amid fragile conditions and that he is still concerned about the unemployment rate in the Eurozone as a whole.

European employment numbers released earlier today showed that in November 12.1 percent remained jobless, holding the record highs. With recent data showing that inflation has slowed to just 0.8 percent, a long way from the ECB’s target, as well as a continuing contraction in Eurozone private lending, Barroso’s upbeat prognosis of the Eurozone’s economic condition may be a little wide of the mark.

US jobs data boost ahead of non-farm payrolls

The December ADP numbers printed at 238k – the biggest gain since November 2012. In addition, the November print was upward-revised to 229k. The strong numbers bode well for Friday’s non-farm payroll print, where Fed will be hoping to see some further improvements in the headline US jobs number.

The Fed moved to cut is monthly asset purchase programme by USD10bn on 18 December, but it will be looking for solid jobs figures on Friday to help vindicate its decision to remove some support from the US economy.

The biggest focus is now on the FOMC minutes released at 19:00 GMT will be on any proposed measures to replace QE. Janet Yellen, confirmed by the US Senate this week as the successor to Ben Bernanke when he stands down from the chairmanship of the Fed on 31 January, has been perhaps the biggest proponent of forward-guidance at the Fed and for increased Fed transparency.

However, The forward guidance issued with the Fed’s December decision thin on the ground - to keep rates lower well past the time that the unemployment rate declines below 6.5 percent. The minutes will be scrutinised for clues as to how the Fed will move to draw down rates if they begin to rise too quickly for the US economic recovery.

EUR/USD remains down on the session ahead of FOMC minutes

EUR/USD is currently trading at USD1.3585, down 0.19 percent after a EUR slump through the morning. The pair hit an early high of USD1.3635 before a higher than expected German trade surplus added to concerns that Eurozone members could not rely on German spending to help lift their economies.
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