EUR/USD Fundamental Analysis – week of September 12, 2016 – Forecast

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Published: Sep 10, 2016, 07:09 UTC

The EUR/USD closed at 1.1235 after trading well above the 1.13 level after Mario Draghi’s press conference and the ECB decision to hold rates and policy.

The EUR/USD closed at 1.1235 after trading well above the 1.13 level after Mario Draghi’s press conference and the ECB decision to hold rates and policy. The euro ended the week with a gain of 0.71% and is a strong buy moving into the new week as the US dollar will give back some of its gains from Friday. According to currency strategist Richard Grace; ‘Global bond yields lifted after ECB President Draghi indicated that the ECB didn’t discuss an extension of its asset purchase plan in last night’s ECB meeting, despite expectations of tweaks to the asset purchase program, and there was no need for extra stimulus ‘for the time being’ […] US bond yields took their cue from the lift in Eurozone bond yields as well as stronger than expected US July consumer credit numbers, stronger than expected weekly claims numbers, and a lift in crude oil prices. Expectations of a September Fed interest rate increase lifted slightly to 28%, supporting the USD.’

A gauge of the greenback jumped after Fed Bank of Boston President Eric Rosengren warned that waiting too long to raise interest rates threatened to overheat the U.S. economy and could risk financial stability. The dollar has almost erased its weekly loss as traders increased the probability that U.S. policy makers will boost borrowing costs as early as this month. Demand for higher-yielding currencies ebbed as European Central Bank policy makers didn’t discuss extension of their bond-purchase plan at their Sept. 7 meeting, fueling speculation central banks start to question the benefits of further monetary easing to bolster economic growth.

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This Week’s Economic Events That You Should Be Monitoring:

Date	Country	Name	Volatility	Previous	Consensus
9/13/2016	GBP	Core Consumer Price Index	3	1.3	1.4
9/13/2016	GBP	Consumer Price Index (YoY)	3	0.6	0.7
9/13/2016	EUR	ECB President Draghi’s Speech	3
9/13/2016	EUR	ZEW Survey – Economic	3	4.6	6.7
9/14/2016	NZD	Gross Domestic Product (YoY)	3	2.8
9/15/2016	AUD	Employment Change	3	26.2	15
9/15/2016	AUD	Unemployment Rate	3	5.7	5.7
9/15/2016	CHF	SNB Interest Rate Decision	3	-0.75	-0.75
9/15/2016	CHF	SNB press conference	3
9/15/2016	GBP	BoE Asset Purchase Facility	3	435	435
9/15/2016	GBP	BoE Interest Rate Decision	3	0.25	0.25
9/15/2016	GBP	Monetary Policy Summary	3
9/15/2016	GBP	BOE MPC Vote Cut	3	9	0
9/15/2016	GBP	BOE MPC Vote Unchanged	3	0	9
9/15/2016	GBP	BOE MPC Vote Hike	3	0	0
9/15/2016	GBP	Bank of England Minutes	3
9/15/2016	USD	Retail Sales (MoM)	3	0	0
9/16/2016	USD	Consumer Price Index (YoY)	3	0.8	1
9/16/2016	USD	Consumer Price Index ECORE	3	2.2	2.2
9/16/2016	USD	Michigan Consumer Sentiment	3	89.8	91