EUR/USD hovers slightly below 1.0900. Economists at ING analyze the pair’s outlook.
PMIs on Thursday could potentially offer some direction to EUR/USD into the weekend
EUR/USD will be primarily driven by US events this week, although some inputs from the Eurozone calendar should not be overlooked. Final February CPI figures today should not surprise, but Tuesday’s ZEW survey will be interesting to check the state of the struggling German economy. As will PMIs on Thursday, which could potentially offer some direction to EUR/USD into the weekend after the FOMC has been digested.
There are also plenty of European Central Bank speakers to hear from, including President Christine Lagarde on Wednesday.
Our view on EUR/USD is that it can trade on the soft side into the FOMC, but could still end the week within the 1.0850/1.0900 range.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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