EUR/USD Fundamental Forecast – May 27, 2016

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Published: May 26, 2016, 10:33 UTC

The EUR/USD is up 27 points on weakness in the US dollar. There is very little data due until later in the US session as traders prepare for a speech by

EUR/USD Fundamental Forecast – May 27, 2016

The EUR/USD is up 27 points on weakness in the US dollar. There is very little data due until later in the US session as traders prepare for a speech by Janet Yellen on Friday as they hope for clues of what the Fed will do at its June meeting. The euro is trading at 1.1181. Members of the Federal Open Market Committee (FOMC) have continued to take a hawkish view on monetary policy this week, with policymakers expressing the opinion that interest rates could rise two or three times before the end of the year. Even though doubts remain over the odds of the Fed opting to hike rates in June, markets have continued to price in a higher likelihood of imminent action, boosting the US Dollar.

However, the appeal of the ‘Greenback’ was muted on Wednesday by weaker-than-expected US Services and Composite PMIs. These suggested that the world’s largest economy was not in such a robust state as might necessitate monetary tightening, also lowering the odds of a June rate hike given the stressed data-dependence of the Fed’s decision.

Safe-haven demand was also lower today as Brent crude broke back above the psychologically important $50 per barrel mark, leading to a surge in risk appetite. This saw the US Dollar easing ground against many of the majors, with the possibility of further weakness on the back of the afternoon’s Durable Goods Order report. Should demand have slowed on the month in April, the case for imminent Fed tightening is likely to diminish further.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Upcoming Economic Events that you should be monitoring:

Friday, May 27, 2016

Cur.	Event	Actual	Forecast	Previous
AUD	RBA Assist Gov Debelle Speaks
JPY	National Core CPI (YoY) (Apr)		-0.4%	-0.3%
JPY	Tokyo Core CPI (YoY) (May)		-0.4%	-0.3%
USD	GDP (QoQ) (Q1)		0.9%	0.5%
USD	GDP Price Index (QoQ) (Q1)		0.7%	0.7%
USD	Michigan Consumer Expectations		86.6	87.5
USD	Michigan Consumer Sentiment (May)		95.4	95.8
USD	Fed Chair Yellen Speaks
USD	Baker Hughes U.S. Rig Count			318