EUR/USD Fundamental Analysis – for the week of August 22, 2016 -Forecast

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Published: Aug 20, 2016, 07:08 UTC

The EUR/USD moved into the new week at 1.1320 near its highest price this quarter. The euro was up almost 1.5% on the week and 4.25% on a year to date

The EUR/USD moved into the new week at 1.1320 near its highest price this quarter. The euro was up almost 1.5% on the week and 4.25% on a year to date basis. As traders are out of their office on summer vacation volumes are expected to be light and politicians are also on holiday as well as bankers which should leave the news light. The euro remains a strong buy this week as the dollar continues to ease ahead of Janet Yellen’s speech on the 26^th.

Skepticism about the ability of central-bank stimulus to boost growth amid political turmoil has triggered record outflows from the region’s equity funds, with a Bank of America Corp. report today showing that managers withdrew money for a 28th straight week. Concern that the European Central Bank stimulus program is hurting profitability at lenders has weighed on their shares all year.

The dollar recovered some poise after hitting seven-week lows against the yen and the euro earlier this week while equity indices struggled on both sides of the Atlantic as a six-session rally for oil prices ran out of steam.

William Dudley, president of the New York Fed, delivered an unexpectedly hawkish set of comments this week, saying the markets were mispricing the risk of a near-term rise in official interest rates and warning that the central bank could still move in September.

His remarks were offset by the minutes of the Fed’s last policy meeting, which offered few clues as to the timing of the next rate rise and were viewed by observers as generally dovish.

Tame US inflation data, in tandem with signs that economic growth was holding up relatively well, added to the confusing picture — as did further comments by Mr Dudley on Thursday highlighting positive developments in the US labour market.

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Week of August 22-25, 2016

Date	Country	Name	Volatility	Previous
8/23/2016	GBP	Inflation Report	3
8/24/2016	EUR	GDP w.d.a (YoY)	3	1.8
8/24/2016	EUR	GBP s.a (QoQ)	3	0.4
8/24/2016	EUR	GDP n.s.a (YoY)	3	3.1