EUR/USD Fundamental Analysis – August 27, 2015- Forecast

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Updated: Aug 26, 2015, 11:48 UTC

Analysis and Recommendations: The EUR/USD tumbled 88 points to trade at 1.1431 as the greenback regained its footing after a better than expected consumer

EUR/USD Fundamental Analysis – August 27, 2015- Forecast

Analysis and Recommendations:

The EUR/USD tumbled 88 points to trade at 1.1431 as the greenback regained its footing after a better than expected consumer confidence report yesterday. Markets are slowly stabilizing and the dollar is normalizing.

After plummeting on Monday following a rout in global equity markets, the currency soared on Tuesday. The dollar index, which measures the greenback against six major peers, was down 1.71 percent at 93.386 in late trading on Monday, Xinhua reported.

The People’s Bank of China (PBOC), China’s central bank, announced on Tuesday a cut in the reserve requirement ratio (RRR) and lower key interest rates. Worries over China’s economic slowdown were soothed by the move, which was described in a PBOC statement as “promoting restructuring” to “stabilize the real economy”.

Market sentiment was also lifted by the overall positive US economic data. Sales of new single-family houses in July were at a seasonally-adjusted annual rate of 507,000, up 5.4 percent from the previous month, said the Commerce Department.

The US consumer confidence for August came in at 101.5, up from 91.0 in July, according to the New York-based research group Conference Board. The upbeat data renewed investors’ expectation for an interest- rate hike this year. The dollar index was up 1.22 percent at 94. 473 in late trading.

On the data front, a quiet calendar in Europe will probably see investors looking to July’s US Durable Goods Orders report. Expectations point to a 0.4 percent decline. US news-flow has deteriorated relative to consensus forecasts in recent weeks, opening the door for a downside surprise that may rekindle worries about global growth and fuel renewed risk aversion.

The spotlight then turns to a scheduled speech from New York Fed President Bill Dudley. The influential central bank official is often seen as being at the heart of consensus on the policy-setting FOMC committee. With that in mind, traders will be keen to hear anything that illuminates how recent market turmoil has influenced the likely timing of the US central bank’s first post-QE interest rate hike.

Fed Funds futures now reflect a delay until January 2016 for the onset of tightening.

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.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
USD	API Weekly Crude Oil Stock	-7.300M	1.900M	-2.300M
NZD	Trade Balance (MoM) (Jul)	-649M	-750M	-194M
NZD	Trade Balance (YoY) (Jul)	-2,690M	-2,660M	-2,850M
AUD	Construction Work Done (QoQ) (Q2)	1.6%	-1.5%	-0.8%
GBP	BBA Mortgages	46.0k	46.0k	44.8k

Upcoming Economic Events that you should be monitoring:

Thursday, August 27, 2015

Cur.	Event	Actual	Forecast	Previous
AUD	Private New Capital Expenditure		-2.5%	-4.4%
GBP	Nationwide HPI (YoY) (Aug)		3.1%	3.5%
GBP	Nationwide HPI (MoM) (Aug)		0.4%	0.4%
EUR	Spanish GDP (QoQ) (Q2)		1.0%	1.0%
RUB	Central Bank reserves (USD)			362.9B
USD	GDP (QoQ) (Q2)		3.2%	2.3%
USD	GDP Price Index (QoQ) (Q2)		2.0%	2.0%
USD	Initial Jobless Claims		274K	277K
USD	Pending Home Sales (MoM) (Jul)		1.0%	-1.8%