EUR/USD Fundamental Analysis August 26, 2014 Forecast

Analysis and Recommendations:

The EUR/USD tumbled after German iFo data reported well below expectations sending the pair to trade at 1.3200. Traders now think the likelihood of additional stimulus program from the ECB is more likely. The dollar surged Monday as investors bet on a US rate hike sooner rather than later, following a speech by Federal Reserve chief Janet Yellen.  Investors picked up the dollar after Yellen discussed slack seen in the US jobs market, while acknowledging improvements in recent US indicators.

Her address on Friday at the annual Jackson Hole conference was seen as a signal of her commitment to the Fed’s current timeline for raising interest rates beginning in the second half of next year, rather than earlier as some analysts and policy makers would like.

Still, the dollar swung upward as market players believed that her comment came out less dovish than expected, while many analysts also assessed the speech as being “balanced”.

The euro weakened against its key counterparts in the early European session on Monday after data showed that German business sentiment weakened more than expected in August. Data from the Ifo institute showed that Germany’s business climate index fell to 106.3 in August. Economists had forecast the indicator to drop to 107 from July’s initially estimated score of 108.

The euro, which closed last week’s deals 1.3238 against the US dollar, dropped to nearly a 1-year low of 1.3183. This may be compared to an early high of 1.3207 against the greenback.

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.

Economic Data August 25, 2014 actual v. forecast

 

Upcoming Economic Events that you should be monitoring:

Government Bond Auction

Date Time Country 

Aug 28 Tentative              EUR       Italian 10-y Bond Auction

Sep 8    Tentative              EUR       Italian 10-y Bond Auction

Sep 10   6:01pm                USD       10-y Bond Auction

Sep 11 Tentative               EUR       German 10-y Bond Auction