EUR/USD Fundamental Analysis – August 24, 2015 – Forecast

Analysis and Recommendations:

The EUR/USD was about the only currency to outperform today helped by the weakness in the US dollar and strong PMI data from the Eurozone and news of snap elections in Greece. The euro climbed to 1.1280 up by 40 points.  The euro-area economy picked up momentum this month, with an improvement in Germany lifting a business index to close to its highest level in four years.

Markit Economics said on Friday that its composite Purchasing Managers’ Index of manufacturing and services rose to 54.1 from 53.9 in July, close to the four-year high reached in June. That’s above the 50 mark that divides expansion from contraction and compares with a median estimate of 53.7 in a Bloomberg survey of economists.

The increase was partly led by Germany, the region’s largest economy, where a factory index rose to the highest in more than a year. That offset “disappointing” numbers in France, where manufacturing shrank for a second month.

Markets had been reckoning that a solid US economy could prompt the Fed to raise rates as soon as September, but the latest data from China, along with sliding commodity prices and unconvincing US inflation data, has led most investors to take their bets on a September hike off the table.

The euro, which is used as a “funding” currency borrowed to buy riskier but higher-yielding emerging market currencies, hit a two-month high of $1.1295 as investors reversed such trades and bought it.

FxEmpire provides in-depth analysis for each currency and commodity 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.

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Monday, August 24, 2015