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EUR/USD Fundamental Forecast – August 23. 2016

By:
Barry Norman
Published: Aug 22, 2016, 11:30 UTC

The EUR/USD dipped 31 points to 1.1293 as the US currency recovered and markets adjusted to the hawkish attitude of the Fed. NBC reported that the dollar

EUR/USD Fundamental Forecast – August 23. 2016

The EUR/USD dipped 31 points to 1.1293 as the US currency recovered and markets adjusted to the hawkish attitude of the Fed. NBC reported that the dollar strengthened and U.S. Treasury yields hit a two-week high on Monday on expectations the Federal Reserve will give a signal this week that it is gearing up to raise interest rates.

An upbeat assessment of the U.S. economy’s strength from Fed Vice Chairman Stanley Fischer on Sunday was seen raising the prospect of Fed chair Janet Yellen flagging up a rate rise at a meeting with the world’s central bankers on Friday.

Over the weekend Fed Vice Chair Stanley Fischer, considered to be the second most influential member on the board and himself the former head of the Bank of Israel, stated that the Fed is “close to its targets” with respect to growth, inflation and employment which suggests that the FOMC will entertain a rate hike before the end of the year. Mr. Fischer is only the latest Fed official to assume a decidedly more hawkish posture in recent weeks, indicating that the Fed may be eager to begin to normalization process sooner rather than later.

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Upcoming Economic Events that you should be monitoring:

August 23, 2016

Country Name Volatility Previous
GBP Inflation Report Hearings 3
USD Durable Goods Orders CORE 2 -0.5
USD Durable Goods Orders 2 -4
USD New Home Sales (MoM) 2 0.592
USD New Home Sales Change (MoM) 2 3.5

Government Bond Auctions

Date Time Country Auction

Aug 24 10:03 Sweden Holds bond auction

Aug 24 10:30 Germany Eur 4bn 0% Oct 2021 Bobl

Aug 24 18:00 US Holds 2yr FRN auction & 5yr note auction

Aug 25 18:00 US Holds 7yr note auction

Aug 26 10:10 Italy Holds zero coupon

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