The EUR/USD ended the week at 1.0976 falling to its lowest level near the end of the trading session on Friday. The pair is down 0.54% for the week after
The EUR/USD ended the week at 1.0976 falling to its lowest level near the end of the trading session on Friday. The pair is down 0.54% for the week after the ECB held rates and policy and Mario Draghi did little to shake up the currency.
There was no drama around today’s ECB press conference as the decision was to keep stimulus program unchanged. An impressive presentation by Mario Draghi, the ECB president, indicated there were few signs of major market dislocation in the immediate aftermath of the UK ‘Brexit’ vote and, while he noted that a proper assessment of the economic impact on the Euro area wasn’t yet possible, he provided reassurance that the ECB would respond appropriately in the event that further action was required.
If the ECB is calm, it certainly isn’t complacent. As a result, any marked evidence of weakness in upcoming surveys is likely to cause expectations of additional ECB easing in September to build.
Uncertainty about future policy remains Mr Draghi will not be unhappy that after his pronouncements considerable uncertainty remains as to whether the ECB will ease again, when such action might occur and what measures might be taken. However, by repeatedly emphasizing that markets should appreciate that the ECB is ready, willing and able to act, he clearly focused attention on the likelihood that some supportive measures will be announced when the ECB holds its next formal policy meeting on September 8th.
After the usual formal announcement of the Governing Council’s policy decisions, the ECB’s opening press statement today discussed at some length what was clearly the focus of attention for the past four weeks; the consequences for the Euro area of the UK vote to leave the EU. The inclusion and prominent positioning of two paragraphs on the issue emphasized that in spite of Mr Draghi’s calm demeanor today, the recent ‘Brexit’ vote is a matter of immediate and substantial concern.
Upcoming week will be significant for US economy as well as European. FOMC meeting and Europe stress testing are in focus for upcoming week.
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Major Economic Events for the week:
Date | Currency | Name | Volatility | Previous | Consensus |
7/27/2016 | AUD | Consumer Price Index (YoY) | 3 | 1.3 | 1.1 |
7/27/2016 | USD | Durable Goods Orders | 3 | -2.2 | -1.1 |
7/27/2016 | USD | Fed’s Monetary Policy Statement | 3 | ||
7/27/2016 | USD | Fed Interest Rate Decision | 3 | 0.5 | |
7/28/2016 | JPY | BoJ Press Conference | 3 | ||
7/29/2016 | JPY | BoJ Interest Rate Decision | 3 | -0.1 | -0.2 |
7/29/2016 | JPY | BoJ Monetary Policy Statement | 3 | ||
7/29/2016 | EUR | Gross Domestic Product (YoY) | 3 | 1.7 | 1.6 |
7/29/2016 | EUR | Gross Domestic Product (QoQ) | 3 | 0.6 | 0.3 |
7/29/2016 | EUR | Consumer Price Index (YoY) | 3 | 0.1 | |
7/29/2016 | EUR | Consumer Price Index – Core | 3 | 0.9 |
Upcoming Government Bond Auctions
Date Time Country
Jul 25 11:30 Germany Eur 1.5bn Jul 2017 Bubill
Jul 25 17:20 Italy Announces details of bond auction
Jul 26 11:10 Italy Holds zero-coupon/BTPei auction
Jul 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund
Jul 28 11:10 Italy Holds bond auction