EUR/USD Fundamental Forecast – August 31. 2016

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Published: Aug 30, 2016, 13:29 UTC

The EUR/USD edged down 20 points to 1.1168 as the greenback continued to gain momentum after better than expected eco data and strong comments on rate

EUR/USD Fundamental Forecast – August 31. 2016

The EUR/USD edged down 20 points to 1.1168 as the greenback continued to gain momentum after better than expected eco data and strong comments on rate increases from Stanley Fischer again today. Prices for Fed funds futures suggested they expect about a 20 percent chance of a hike next month and just over even odds for such a move in December. The Fed also has a policy meeting scheduled for early November. The U.S. Labor Department’s monthly employment report on Friday is expected to show the economy added 180,000 jobs in August, according to the median forecast in a Reuters poll.

German inflation indices for August showed worse-than-expected data. CPI index for August showed unchanged pace of increase in prices on monthly basis, while the CPI on year-on-year basis accelerated in the same pace as in July, 0.4%. The big event in the EU today was the decision by the EU commission to force Ireland to claw back tax breaks it gave to Apple. The European Commission accused Ireland in 2014 of dodging international tax rules by letting Apple shelter profits worth tens of billions of dollars from tax collectors in return for maintaining jobs. Apple and Ireland rejected the accusation and have both said they will appeal any adverse ruling.

The source said the Commission will recommend a figure in back taxes that it expects to be collected but it will be up to Irish authorities to calculate exactly what is owed.

Apple was one of the first U.S. companies relocate much of its earnings in Ireland, allowing the company to pay a much corporate lower tax rate in some years — as low as 2 percent, compared to 35 percent in the U.S.

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August 31, 2016

Country	Event	Volatility	Previous
GBP	Gfk Consumer Confidence	2	-12
JPY	Industrial Production	2	-1.5
JPY	Industrial Production	2	2.3
AUD	HIA New Home Sales	2	8.2
CHF	UBS Consumption Indicator	2	1.34
EUR	Unemployment Rate s.a.	3	6.1
EUR	Unemployment Change	3	-7
EUR	Unemployment	2	11.6
EUR	Unemployment Rate	2	10.1
EUR	Consumer Price Index	3	0.2
EUR	Consumer Price Index – Core	3	0.9
USD	ADP Employment Change	2	179
CAD	Gross Domestic Product Annualized	2	2.4
CAD	Gross Domestic Product	2	-0.6
USD	Chicago Purchasing Managers’ Index	2	55.8
USD	Pending Home Sales	2	1
USD	Pending Home Sales	2	0.2