Here are some general data. The key countries are Germany, France, Italy and Spain. The US dollar is the reserve currency of the world. When markets are calm, this influx pushes the common currency higher. However, the eurozone has its share of economic and political issues and speculation takes its toll.
While the worst may be behind us, it is always looming. The euro-zone economies are growing at a robust pace in The ECB will halve bond-buys to 30 billion euros from January However, it left the door open to extending the QE program beyond September, and this hurt the euro.
A weaker euro makes exports more attractive and pushes imported inflation higher. Draghi is happy with growth but worried about inflation. The political uncertainty in Germany is becoming an issue after inconclusive elections in September. A fresh round of elections joins the crisis in Catalonia and the political instability in Italy. The Federal Reserve has maintained its plan for three rates hikes in despite lower US inflation.
The upcoming week features a constant stream of data including PMIs, industrial output and more. Inflation fell below expectations for the second month in a row, weighing on the euro. The good news comes from a surprising drop in unemployment to 8. Hopes for a grand coalition in Germany continued helping the euro. In the US, upbeat new home sales helped the dollar recover as Powell tried not rocking the boat.
That did not hold for too long though. The cycle high of 1. It is followed by the round number of 1. The Fed is hesitating regarding the next moves while Europe looks more stable.
This could continue supporting the pair. Follow us on Sticher or iTunes. The upcoming week features a…. The upcoming week features fresh inflation figures,….
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