Vasilis Tsaprounis
Independent Analyst
The single European currency is trading near 1,1150 level at the opening of the new week in an extremely tight trading range as investors continue to avoid taking big bets.
The dust from the Fed's aggressive move to cut interest rates by 50 basis points last week appears to have settled with the European currency currently struggling to benefit from the narrowing interest rate gap between the euro and the dollar.
The interest rate cut cycle that has begun monopolizes the interest of investors as the next moves by the two central banks will largely determine the course of the exchange rate.
At the same time, the sluggish growth of the European economy currently remains one of the main weights in the effort of the European currency to move to significantly higher prices.
The economic data that will be announced in the near future on the path of inflation, growth and the labor sector are expected to give clearer signals about the intentions of the Fed and ECB regarding the next moves until the end of the year.
Starting with today's agenda which include surveys of manufacturing and services sectors in United States and eurozone which are harbingers of growth rates.
Last week although stormy with economic news culminating in the Fed meeting failed to give any direction to the exchange rate which confirms that the pair is extremely heavy and we are unlikely to see any major surprises at the moment with prices moving far away from current levels.
I maintain my thoughts of buying the US currency at some new sharp peak well above 1,12 level without moving away from the assessment of the wider range of possible variation between 1,08 and 1,14 by the end of the year.
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