EUR/USD: Euro remains steady on 1.0700 level ahead Fed's favorite inflation index
|Τhe exchange rate remains trapped near 1,07 levels in a narrow range with investors for another day avoiding taking big bets.
Despite the rather rich agenda yesterday did not give any surprises, all the announcements were close to the estimates and consequently the exchange rate remained in a narrow range of fluctuation on either side of the 1.0700 level.
Although the dust from the political upheavals of the European elections has fully settled, Sunday's elections in France are gathering attention and the question remains whether the any outcome will in any way affect the European currency.
The prospect of a Fed and Ecb rates cut remains high on the agenda and remains one of the key catalysts which influence the course of the exchange rate.
Βets are currently unchanged with the possibility of two more cuts from the Εcb and one from Fed towards the end of the year remaining the two main scenarios.
Today's announcement on Personal Consumption Expenditures Price Index in US is eagerly awaited as it is a strong harbinger of inflationary pressures and one of Fed's favorite indicators it consults to make monetary policy decisions.
Some surprise away from estimates is expected to strongly impact the markets with significant increase in volatility.
Today's agenda is completed with several announcements of macroeconomic data from Eurozone countries as well the University of Michigan's survey of consumer sentiment in US.
The exchange rate's trapping at these levels is becoming "fatiguing" and many investors prefer to stay away as the risk of a sharp unsqueeze with possible execution large stop loss orders continues to rise.
The general picture of the market remains the same with the interest rate differential clearly favoring the US Dollar and gives the possibility and room for further gains in the US currency but at the same time the reaction behaviors of the European currency remain in play.
No change in my thinking, I remain on hold and wait for a possible buy in the European currency close to the levels of 1,06 and possibly well below depending on the developments and today's announcements.
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