EUR/USD Fundamental Analysis October 3, 2014 Forecast

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Updated: Aug 24, 2015, 22:00 UTC

Analysis and Recommendations: The EUR/USD gained 22 points ahead of Mr. Draghi. The euro climbed to 1.2641 as traders now think that the ECB will sidestep

EUR/USD Fundamental Analysis October 3, 2014 Forecast

Analysis and Recommendations:

The EUR/USD gained 22 points ahead of Mr. Draghi. The euro climbed to 1.2641 as traders now think that the ECB will sidestep adding stimulus in the hopes that the weak euro will stimulate exports and manufacturing. With the European Central Bank’s latest assessment of the economy due soon, the euro’s decline has stalled.

And how the Eurozone’s central bank chooses to flesh out its stimulus plan is the chief focus for investors globally on Thursday.

As well as a weaker euro, the ECB’s decision comes against the backdrop of a falling oil price, weaker stock markets and an increase in volatility across financial markets.

The market will be looking for confirmation of the size and scope of the ECB’s asset purchase program at today’s meeting. While the ECB is set to provide further technical details, the big question will be if the ECB commits to an overall size of program or looks to maintain flexibility. Market expectations for the overall scope are elevated, in our view. Reported market consensus of asset purchases is set at the EUR500bn level. Our credit strategists believe this will be difficult to achieve via the asset groups already announced…However, Draghi may choose a more open-ended approach, not announcing an overall target but just the time period and the criteria for asset purchases; this could keep market expectations elevated and EUR under pressure.

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 actual vs. forecast:

Cur.	Event	Actual	Forecast	Previous
AUD	Building Approvals	3.0%	1.0%	2.1%
AUD	Trade Balance	-0.787B	-0.700B	-1.075B
EUR	Spanish Unemployment	19.7K	31.3K	8.1K
GBP	Construction PMI (Sep)	64.2	63.5	64.0
EUR	Interest Rate Decision		0.05%	0.05%
USD	Initial Jobless Claims		297K	293K
*EUR*	*ECB Press Conference*
USD	Factory Orders (MoM)		-9.3%	10.5%

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
GBP	Services PMI (Sep)		59.1	60.5
USD	Nonfarm Payrolls (Sep)		215K	142K
USD	Unemployment Rate		6.1%	6.1%
USD	ISM Non-Mfg. PMI		58.5	59.6