BUZZ-COMMENT-EUR/USD's song remains the same and parity may be the outro
Jan 8 (Reuters) - EUR/USD fell below the 5-DMA Wednesday and erased its early 2025 gains as divergent economies, fresh tariff threats and techs fuel expectations parity will be reached this year.
Drops in German industrial orders and retail sales for November indicated economic growth remains weak for the euro zone's largest economy, which could keep the ECB on its rate cutting path.
An unexpected drop in U.S. jobless claims suggests the labor market remains solid, which could put the Fed's cutting cycle on pause.
The threat of a fresh tariff program is likely to keep the dollar sought after. CNN reported President-elect Donald Trump is mulling declaring a national economic emergency which could allow for a new tariff program.
Technicals highlight downside EUR/USD risks. Falling daily and monthly RSIs imply downward momentum is in place and EUR/USD's move below the falling 5- and 21-DMAs reinforce bearish signals.
A Reuters poll indicated 24 of 38 foreign exchange forecasters said parity will trade this year. Of those, most said it would do so in the first half of this year.
All eyes will be on U.S. December payrolls data Friday. EUR/USD bulls need a downside surprise, which could drive yields US10YT=RR lower, tighten German-U.S. spreads US2DE2=RR as well as Fed SRAM26, ECB FEIZ5 terminal rate spreads and send EUR/USD upwards.
For more click on FXBUZ
(Christopher Romano is a Reuters market analyst. The views expressed are his own)
((christopher.romano@thomsonreuters.com;))
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