Vasilis Tsaprounis
Independent Analyst
Signs of a mild correction for the European currency after a four-day rally that took it to the threshold of 1,12 level, surpassing previous December highs in an environment where the US currency is strongly contested against all major currencies.
Yesterday's announcement of Minutes from Fed's last meeting didn't surprise and speculations on prospects of a rate cut by the Fed in September remains on the table.
Last month's disappointing US jobs data acted as a trigger to increase speculation against the US dollar, as several investors bet on a more than 25 basis point rate cut in September.
However, the base scenario remains at 25 basis points which is discounted by the markets.
The next two days have quite a rich agenda with top-tier macroeconomic news, today on the course of manufacturing and services sectors in EZ and US, while tomorrow stands out Jerome Powell speech in Jackson Hall.
If there is no further disappointing data which would worsen the sentiment against the US currency the positive momentum of the European currency I think is close to the end so I keep the thought to buy the dollar near the 1,12 level.
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