EUR/USD Fundamental Analysis – December 30, 2015 – Forecast

Analysis and Recommendations:

The EUR/USD gained 10 points as the greenback continues to ease post rate increase. The euro is holding at 1.0978 with little news and no data. The dollar continues to decline in post rate increases moves as traders are focused on when the FOMC will increase next. “Investors find it extremely difficult to make major moves as always in this season between the Christmas and the year-end holiday season,” Chief foreign-exchange strategist in a morning note. The week is typically marked by thin trade as many market players are on vacation, although it is also when investors traditionally fine-tune their portfolios before year-end.

Recent oil price gyrations remained a source of concern. Light, sweet crude for February delivery lost $1.29, or 3.4%, to $36.81 a barrel on the New York Mercantile Exchange on Monday, snapping a four-session winning streak.

Oil prices weren’t staying high enough to increase risk appetite, said Kumiko Ishikawa, a senior foreign-exchange analyst at Gaitame.com Research Institute. This is despite a U.S. economy that is on an upswing after the Federal Reserve raised rates this month for the first time in several years, which typically would raise risk sentiment.

The euro held its gains in thin trading Tuesday, after a European Central Bank (ECB) official hinted at another wave of stimulus, while fears about China’s economy dented the yuan.

ECB executive board member Yves Mersch said policymakers have “by no means used up all our ammunition”, according to an excerpt from an interview with the International Bankers Forum.

The possibility of more easing – which would tend to weaken the euro – comes after the ECB disappointed markets this month with the limited scope of its newest bid to revive the struggling eurozone economy.

The euro surged in the wake of the ECB’s less-than-expected policy measures.

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.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, December 30, 2015

Government Bond Auctions

Date Time Country

Dec 29 11:10 Italy Auctions CTZ

Dec 29 n/a UK Announces details of Gilt auction on Jan 05 & 07

Dec 29 19:00 US Holds 5-year note auction

Dec 30 11:10 Italy Auctions BTPs/CCTeus

Dec 30 19:00 US Holds 7-year note auction