The Euro has had a soft week and it is not entirely clear why. The ECB's trade-weighted Euro is off about 0.3% so far this week. Perhaps there is some month-end portfolio rebalancing underway, ING’s FX strategist Chris Turner notes.
Two events to define the EUR move
“Two events are on the eurozone agenda today. The first are the releases of the August flash CPI data for Germany, Spain and Belgium. The Eurozone figure will be released tomorrow. The second event is a speech from ECB Chief Economist Philip Lane (1115CET). Markets currently price 65bp of ECB easing. It seems a little too aggressive to us – yet we doubt ECB's Lane will feel the need to correct that right now.”
“EUR/USD has so far held support at 1.1100. We see a scenario where 1.1080/1100 does hold before EUR/USD moves higher still. That seems unlikely today, but the best chance of that happening is probably a higher-than-expected US jobless claims figure at 1430CET today.”
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