EUR/USD Fundamental Analysis – September 1, 2015 – Forecast

Analysis and Recommendations:

The EUR/USD gained a few points after eurozone inflation reported better than forecast reach 0.2%. The euro gained 13 points to 1.1200. Eurozone consumer prices were barely higher than a year earlier in August, a development likely to fuel speculation that the European Central Bank will have to expand its recently launched bond-buying program.

After a long, steady decline in the inflation rate, consumer prices first fell below their year-ago levels in December. The next month, the ECB announced the launch of a program of quantitative easing, under which it would buy more than €1 trillion ($1.12 trillion) of mostly government bonds. It launched the program in March, with the aim of raising the inflation rate to its target of just under 2%.

Eurozone consumer prices rose for the first time in six months during May, a minor victory for the ECB in its campaign to avoid a debilitating period of deflation, during which businesses and households might hold back on spending in the expectation that they will get better deals in the future.

Federal Reserve Vice Chairman Stanley Fischer, in the most anticipated remarks of the two-day event, proclaimed his faith that inflation is poised to move upward.

“There is good reason to believe that inflation will move higher as the forces holding down inflation dissipate further,” he said Saturday on a panel on inflation dynamics with other top central bankers from Europe and India that wrapped up the conference.

While Fischer was careful to announce that he wasn’t signaling an impending rate increase, the remarks suggested a move wasn’t ruled out when the Federal Open Market Committee gathers in Washington September 16-17.

“He was very clear that September is still on the table, though he made no promise about it,” said Randall Kroszner, an economics professor at the University of Chicago and a former Fed governor who attended Jackson Hole.

Investors have pushed up the probability of a Fed move next month to 38 percent late Friday in New York, from 24 percent on Aug. 26, according to trading in federal funds futures. They see a 49 percent chance of a move in October.

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:

Tuesday, September 1, 2015

Government Bond Auctions

Date Time Country

Sep 01 11:15 Austria Holds RAGB bond sale

Sep 01 00:00 UK Announces details of 3.5% 2045 Gilt

Sep 02 11:03 Sweden Holds bond auction

Sep 02 11:30 Germany Eur 4bn 0.25% Oct 2020 Bobl

Sep 02 11:30 UK Auctions new Jan 2021 Gilt

Sep 03 10:30 Spain Auctions Bonos/Obligaciones

Sep 03 11:10 France Auctions OATs

Sep 03 00:00 US Announces details of 3yr note on 08 Sep, 10yr note on 09 Sep

Sep 03 00:00 US Announces details of 10-year note on 09 Sep