EUR/USD Fundamental Analysis – October 8, 2015 – Forecast

Analysis and Recommendations:

The EUR/USD declined 32 points to trade at 1.1240 remaining in the middle of its trading range.  The markets are keeping close tabs on the Federal Reserve, which will release the minutes of its last policy meeting on Thursday. For months, expectations had been running high that the Federal Reserve might press the rate trigger and bump up rates at the September meeting. However, the Fed stayed on the sidelines and maintained rates, and the US dollar faced broad pressure from its rivals as a result. At the same time, the policy statement had a hawkish tone, giving the markets hope that the Fed could still make a move prior to the end of the year.

These hopes have been largely dashed by a dismal US Nonfarm Payrolls report late last week, as just 142 thousand jobs were created, compared to an estimate of 201 thousand. However, market sentiment can change fairly quickly, and if the US rebounds with some strong data, we’ll likely see more optimism about a rate hike. With this background in mind, Thursday’s minutes take on added significance and could impact on the movement of EUR/USD.

Industrial production in Germany fell 1.2% m/m in August, after a 1.2% growth seen in the July according to Destatis. Markets had expected a 0.2% gain. On annual basis, production added 2.3% in Aug, versus a 0.8% gain in July and standing below the projected 3.3% growth.

Moreover, a broadly supported US dollar on the back of higher treasury yields, also adds to the bearish pressure on the major. The benchmark 10-year treasury yields rally 1.47% to 2.065%.

Meanwhile, the main currency pair is expected to track the sentiment on the European markets amid a data-deficient EUR calendar ahead.

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, October 8, 2015

Government Bond Auctions

Date Time Country

Oct 07 11:30 Germany Eur 4bn Aug 2025 Bund

Oct 07 16:30 Sweden Announces details of auction on 14 Aug

Oct 07 19:00 US Holds 10-year note auction

Oct 08 11:03 Sweden Holds I/L bond auction

Oct 08 17:30 Italy Announces details of BTP/CCTeu on 13 Oct

Oct 08 19:00 US Holds 30-year bond auction