The greenback retraced some of its earlier fall, despite the weaker than expected ADP employment figure yesterday. Analysts attribute the correction to an initial overreaction during yesterday’s morning as the USD had continued to weaken. Also, analysts fear that the market may be pricing too aggressively the possibility of a rate cut by the Fed sooner. The US labor department is to release its Employment report for May tomorrow and the markets are expected to scrutinize the employment data to estimate whether there is slack in the US employment market or not.

ECB interest rate decision

The ECB is to release its interest rate decision today (11:45, GMT) and is widely expected to remain on hold at 0.0%. EUR OIS imply a probability of 95% for the bank to remain on hold at the current stage. Given the probably unchanged interest level, the markets are expected to be influenced by ECB President Mario Draghi's accompanying statement. The bank may sound dovish given the recent soft inflation rate and despite some hopes still existing regarding growth. Points of special interest would include the announcing of possible terms for the new TLTRO program, any further rate guidance and any changes in the bank’s forecasts.

Other economic highlights, today and early tomorrow

Today during the European session, we get Germany’s factory order’s growth rate for April and Eurozone’s 2nd estimate of the GDP growth rate for Q1. In the American session, we get the US international trade balance for April and Canada’s trade balance figure also for April as well as the Ivey PMI for May. In tomorrow’s Asian session, we get Japan’s household spending for April. As for speakers, please note that BoJ Governor Kuroda, BoE Governor Carney, IMF’s Christine Lagarde, Dallas Fed President Kaplan, NY Fed President Williams, BoJ Governor Kuroda and San Francisco Fed President Daly are scheduled to speak.

USD/JPY H4

‍

EUR/USD H4

‍

‍