EUR/USD Fundamental Analysis – November 5, 2015 – Forecast

Analysis and Recommendations:

The EUR/USD continued to ease after comments from Mario Draghi once again shifted markets back to December stimulus. The euro is down 41 points to 1.0923 as the US dollar continued its three day rally. Speaking at a cultural event in Frankfurt, Draghi repeated that the ECB would review the degree of monetary stimulus required at the next governing council meeting in December, but is “willing and able to use all the instruments available”.

Growth prospects in emerging markets and “external factors” are dragging on the outlook for growth and inflation, he said. Domestic demand remains “resilient”, however.

Last month, Draghi said the ECB would be better able to decide the level of stimulus needed once the latest inflation forecasts for the Eurozone came in.

The euro declined against the dollar for a second day as the prospect of further monetary easing in Europe contrasted with speculation the Federal Reserve will increase interest rates at its December meeting.

The single currency weakened against 14 of its 16 major peers after European Central Bank President Mario Draghi reiterated on Tuesday the ECB will consider increasing stimulus at its December meeting. He said the central bank was “willing and able to act by using all the instruments available within its mandate if warranted in order to maintain an appropriate degree of monetary accommodation.”

Investors will now turn their attention to Fed Chair Janet Yellen who is scheduled to address the U.S. Congress on Wednesday. This will be her first speech since she said last month that the central bank could still raise rates at its Dec. 15-16 meeting.

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:

Wednesday, November 4, 2015

Government Bond Auctions

Date Time Country

Nov 03 10:10 Austria Holds RAGB bond sale

Nov 04 15:30 Sweden Announces details of Bond on 11 Nov

Nov 04 N/A Holland Announces details of Bond on 10 Nov

Nov 05 09:30 Spain Auctions Bonos

Nov 05 09:50 France Auctions OATs

Nov 05 10:03 Sweden Holds I/L bond auction

Nov 09 12:00 Norway Details bond auction on 11 Nov

Nov 09 15:30 Italy Announces details of BTPs/CCTeu on 12 Nov

Nov 09 N/A US Holds 3-year note auction

Nov 10 10:30 UK 0.125% 2058 I/L Gilt auction

Nov 10 N/A Holland Eur 2.0-3.0bn 0% Apr 2018 DSL

Nov 10 N/A US Holds 10-year note auction

Nov 11 10:03 Sweden Holds bond auction

Nov 11 11:15 Norway Holds bond auction

Nov 11 10:30 Germany Eur 3bn 0.25% Oct 2020 Bobl

Nov 12 10:10 Italy Auctions BTPs/CCTeus

Nov 12 10:30 UK 4.25% 2039 Gilt auction

Nov 12 N/A US Holds 30-year bond auction