EUR/USD Fundamental Analysis – June 25, 2015 – Forecast

Analysis and Recommendations:

The EUR/USD recovered 44 points to trade at 1.1212 recovering from some of yesterday’s losses. Lackluster German data weighed on the euro. The dollar index eased after hitting its highest in over a week as U.S. 10-year Treasury yields dipped on Wednesday, with investors’ focus slowly shifting from Greece to prospects for higher U.S. interest rates.

Reasonably good U.S. data, comments from Federal Reserve Governor Jerome Powell, who said he was prepared to raise interest rates twice this year, and higher U.S. yields, boosted the dollar on Tuesday.

German business morale weakened for a second month in a row in June, a leading survey showed today, suggesting concerns about the Greek debt crisis are hitting the mood in corporate boardrooms across Europe’s largest economy.  Ifo’s business climate index, based on a monthly survey of some 7,000 firms, dropped to 107.4 in June from 108.5 in May.

That was its weakest reading since February and was below the Reuters consensus forecast for a reading of 108.1.

The single currency will probably take its cues from the outcome of another emergency meeting of Eurozone finance ministers in Brussels. Policymakers will be focused on Greece and the updated set of proposed reforms that Athens submitted to its creditors earlier in the week. The government means to trade the promise of delivering on these proposals for the pay-out of the last tranche of funding through Greece’s second bailout package before it expires at month-end.

Markets fear that if negotiations falter, a subsequent Greek default will take the country out of the Eurozone and trigger as-yet unknown consequences. With that in mind, traders are anxiously awaiting confirmed signs of a breakthrough or a final collapse of negotiations without further room to maneuver.

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:

Thursday, June 25, 2015

Government Bond Auctions

Date Time Country

Jun 23 15:30 Italy Announces details of CTZ on 26 Jun

Jun 23 17:00 US Auctions 2-year notes

Jun 24 09:15 Norway Holds bond auction

Jun 24 16:00 US Auctions 2-year FRNs

Jun 24 17:00 US Auctions 5-year notes

Jun 25 09:10 Italy Auctions BTPei

Jun 25 15:30 Italy Announces details of BTP/CCTeu on 30 June

Jun 25 17:00 US Auctions 7-year notes

Jun 30 11:10 Italy Auctions BTPs/CCTeus

Jun 29 11:30 Germany Eur 1.5bn 12M (Jun 2016) Bubills

Jul 01 11:30 Germany Eur 5bn Oct 2020 Bobl

Jul 02 10:30 Spain Auctions Bonos

Jul 02 11:10 France Auctions OATs

Jul 02 11:30 UK Conventional Gilt auction

Jul 02 18:00 US Details 3/10 year notes, plus 30-year bond