EUR/USD Fundamental Analysis – December 1, 2015 – Forecast

Analysis and Recommendations:

The EUR/USD fell 20 points to trade at 1.0573 after German retail sales plummeted and traders prepare for a massive stimulus program from the ECB later this week.  The U.S. payrolls report on Friday should cement expectations that the Fed will move. Net bets on dollar appreciation rose to their highest in eight months in the week to last Tuesday. They are still only around 60 to 70 percent of highs hit in March and April. The main focus for markets this week will be a series of central bank meetings, chiefly the ECB’s on Thursday, when it is widely expected to cut interest rates on euro deposits and extend its quantitative easing program.

By contrast, the Federal Reserve is expected to raise U.S. rates for the first time in almost a decade later in December. The U.S. central bank has held the federal funds rate near zero since the aftermath of the global financial crisis. It managed to wrongfoot some investors back in September with its decision not to lift interest rates because of weakening global growth. It noted a recent surge in market volatility – notably from China – and sparked claims from some economists that it had created a “third mandate.”

The dollar reached an 8 1/2-month high against a basket of currencies on Monday, as the prospect of further stimulus this week from the European Central Bank drove the euro to its lowest since April.

Before the expected announcement of its joining the IMF’s basket of reserve currencies, China’s yuan gained around 0.4 percent offshore amid talk of intervention by Beijing to tighten the spread between on- and offshore rates.

The main focus for markets this week will be a series of central bank meetings, chiefly the ECB’s on Thursday, when it is widely expected to cut interest rates on euro deposits and extend its quantitative easing program.

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:

 

Upcoming Economic Events that you should be monitoring:

Tuesday, December 1, 2015

Government Bond Auctions

Date Time Country

Dec 02 11:30 UK Gbp 3.75bn 1.5% Jan 2021 Gilt

Dec 02 16:30 Sweden Announces details of Bond on 11 Dec

Dec 03 10:30 Spain 1.15% Jul 2020 Bono

Dec 03 10:50 France

Dec 03 11:03 Sweden Sek 0.7bn 1%

Dec 07 13:00 Norway Details bond auction on 09 Dec

Dec 07 17:30 Italy Announces details of BTP/CCTeu on 11 Dec

Dec 08 11:30 UK 3.5% 2045 Gilt auction

Dec 08 19:00 US Holds 3-year note auction

Dec 09 11:03 Sweden Holds bond auction

Dec 09 11:05 Norway Holds bond auction

Dec 09 11:30 Germany Eur 3bn Dec 2017 Schatz

Dec 09 19:00 US Holds 10-year note auction

Dec 10 19:00 US Holds 30-year bond auction

Dec 11 11:10 Italy Auctions BTPs/CCTeus