Outlook and Recommendation The EUR/USD closed the month on a down note well below its average trading range after the release of disappointing eurozone
The EUR/USD closed the month on a down note well below its average trading range after the release of disappointing eurozone PMI and inflation data. The pair closed the month at 1.2630.The steady improvement in the US macroeconomic outlook is at the core of the sustained outperformance of the US dollar (USD) against major peer currencies, compounded by the bullish directional trend in US$-denominated securities markets. Following a strong second quarter (expanding at an annualized rate of 4.6%), the US economy is well positioned to grow by 2.1% this year before accelerating to a 3.2% growth rate in 2015. Heightened geopolitical tension in both Europe and the Middle East has not, thus far, had any material impact on our currency market view, but remains the core risk. Divergent monetary policies amongst major central banks in developed economies remain a core factor swaying capital flows in foreign exchange markets.
The directional shift towards a depreciating euro (EUR) should remain in place throughout the latter part of the year and well into the early months of 2015. Persistent structural weakness affecting a recovery in employment and domestic activity within the eurozone will keep the European Central Bank (ECB) on the defensive, prolonging a near-zero interest rate environment
The EUR is expected to trend lower this year and next as the alignment of both macroeconomic fundamentals and flows work against the currency
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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.
Upcoming Economic Events that you should be monitoring:
Cur. Event
Wednesday, October 1
CNY Manufacturing PMI
EUR German Manufacturing PMI
GBP Manufacturing PMI
USD ADP Nonfarm Employment Change
USD ISM Manufacturing PMI
Thursday, October 2
GBP Construction PMI
EUR Interest Rate Decision
Friday, October 3
GBP Services PMI
USD Nonfarm Payrolls
USD Unemployment Rate
USD ISM Non-Manufacturing PMI
Monday, October 6
CAD Ivey PMI
Tuesday, October 7
GBP Manufacturing Production (MoM)
Thursday, October 9
GBP Interest Rate Decision
Friday, October 10
CAD Employment Change
Monday, October 13
CNY Trade Balance
Tuesday, October 14
EUR German ZEW Economic Sentiment
Wednesday, October 15
CNY CPI (YoY)
GBP Average Earnings Index +Bonus
Thursday, October 16
12:00 EUR CPI (YoY)
Friday, October 17
15:30 CAD Core CPI (MoM)
Government Bond Auction
Date Time Country
Oct 01 11:03 Sweden Bond auction
Oct 01 11:30 Germany Eur 5.0bn Aug 2024 Bund auction
Oct 01 11:30 UK Auctions 2% 2020 Gilt
Oct 02 10:30 Spain Bono/Obligacion auction
Oct 02 17:00 US Announces details of 3/10Y Note