Eur/usd - page 175
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EUR/USD weekly outlook: October 20 - 24
The euro fell against the dollar on Friday as the greenback was boosted by data showing that U.S. consumer sentiment unexpectedly improved this month.
EUR/USD was down 0.38% to 1.2759 in late trade, not far from session lows of 1.2745.
The pair is likely to find support at around 1.2625 and resistance at 1.2843, Thursday’s high.
The greenback was boosted after a report showed that the University of Michigan’s consumer sentiment index unexpectedly rose to 86.4 in October, the most since July 2007.
Another report showed that housing starts rose more than expected last month, bolstering the outlook for the sector.
The data reinforced expectations that the Federal Reserve will raise interest rates in the second half of 2015.
The dollar fell against the other major currencies on Wednesday, touching a three-week trough against the euro amid a selloff sparked by fears that slower global growth would act as a drag on the U.S. economy.
Germany’s government cut its forecast for economic growth for this year and next on Tuesday, after recent data pointed to weakness in exports and industrial output.
The euro area’s largest economy now expects growth of 1.2% this year down from 1.8% previously and growth of 1.3% in 2015, down from 2%.
On Thursday, European Central Bank official Ewald Nowotny said the bank still has leeway for more action to address slowing inflation in the euro area, but added that the euro zone economy did not need emergency measures.
In recent months the ECB has cut interest rates to record lows, extended new four-year loans to banks and announced a plan to purchase asset-backed securities, a form of quantitative easing, in a bid to shore up the ailing euro area economy.
Elsewhere, the single currency edged higher against the yen on Friday, with EUR/JPY easing up 0.15% to 136.38 in late trade, off Thursday’s 11-month lows of 134.12.
In the week ahead, the euro zone is to release preliminary data on private sector activity. The U.S. is to release data on consumer inflation, as well as reports on both existing and new home sales.
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Germany's Schaeuble wants more investment but no new debt
German Finance Minister Wolfgang Schaeuble told a newspaper on Sunday that he wanted to increase investment spending and improve competitiveness in Europe's biggest economy but not at the expense of achieving a balanced budget next year.
A raft of gloomy economic data and expectations of a slowdown in German growth has contributed to jitters on world markets and Schaeuble is under pressure to spend on roads, railways, broadband networks and energy grids to help growth.
In an interview with the Welt am Sonntag, Schaeuble said criticism of the government on insufficient investment or lacking competitiveness was justified, but that Berlin was working on these at both the national and European levels.
"We must invest more and improve our competitiveness. We must get to work on this -- quickly and in a concrete way," Schaeuble told the paper.
"It will not all happen overnight. But we must work on certain things now, like the European digital union, the energy union or the sustainable maintaining of our infrastructure."
Hit by the effect of crises abroad, a weak euro zone and limp domestic demand, Germany has slashed its growth forecasts to 1.2 percent in 2014 from 1.8 percent and to 1.3 percent in 2015 from 2.0 percent.
But Schaeuble, who is known for his tough line on budget discipline, insisted Germany would not achieve growth on credit and that he still expected to reach a balanced budget next year for the first time since 1969.
"We must keep to what we have promised," he said.
In the medium term, the defense budget might be increased due to demands from international partners and "geopolitical risks", he said. Germany is arming Kurds in northern Iraq to help them fight Islamic State militants.
Schaeuble did not comment on the turmoil on world markets other than to say that talking up crisis scenarios did not help anyone and weaker economic developments reflected the changed situation in the world.
Asked if Greece should ditch hopes of exiting its bailout program by the end of the year, he repeated his usual line.
"Greece must resolutely continue to implement the agreed reforms. In its own interests. Being reliable creates confidence - also on the markets," he said.
A sell-off in Greek bonds this week has led some investors to question whether Greece would indeed stick to a plan to emerge from the program by the end of this year.
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The EURUSD initially tried to rally during the course of the day on Friday, but fell back below the 1.28 level. Is expected a strong resistance from 1.2994 limiting the upside and bringing a fall resumption. Below 1.2624 minor support will turn bias back to the downside.
Euro zone current account 18.9B vs. 21.3B forecast
The euro zone’s current account fell unexpectedly last month, industry data showed on Monday.
In a report, European Central Bank said that Euro zone current account fell to a seasonally adjusted 18.9B, from 21.6B in the preceding month whose figure was revised up from 18.7B.
Analysts had expected Euro zone current account to rise to 21.3B last month.
Italian Industrial New Orders 1.5% vs. -1.0% forecast
Italian industrial new orders rose unexpectedly last month, official data showed on Monday.
In a report, Istat said that Italian Industrial New Orders rose to 1.5%, from -1.5% in the preceding month.
Analysts had expected Italian Industrial New Orders to fall -1.0% last month.
price is at a strong resistance level 1.2790 it will decide where the price will go a break above 1.2790 will push the price higher a break under will pull the price back to 1.2700.
I am totally agree with you.
EURUSD initially fell during the course of the yesterday Asian session, but rose back up to the 1.28 level on the European and US session. The pair is managing to stay above the 10-day moving average and we might see a rally to the 50 day moving average at 1.2857.
European Economics Preview: U.K. Public Sector Finance Data Due
Public sector finance from the U.K. is the major report due on Tuesday, headlining a light day for the European economic news.
The Swiss Federal Customs Administration is set to release foreign trade data at 2.00 am ET. The trade surplus is forecast to rise to CHF 2.49 billion in September from CHF 1.33 billion in August.
In the meantime, Statistics Finland is slated to publish unemployment figures. The jobless rate is expected to rise to 7.9 percent in September from 7.4 percent in August.
At 3.00 am ET, Hungary's average gross wages data for August is due. Wages were up 3 percent year-on-year in July.
The Office for National Statistics is scheduled to release U.K. public sector net borrowing data for September. Government borrowing totaled GBP 12.5 billion in August.
ECB looking at corporate bond buys, could move as soon as Dec - sources
The European Central Bank is considering buying corporate bonds on the secondary market and may decide on the matter as soon as December with a view to begin buying early next year, several sources familiar with the situation told Reuters.
The ECB has already carried out work on such purchases, which would widen out the private-sector asset-buying programme it began on Monday - stimulus it is deploying to try to foster lending to businesses and thereby support the euro zone economy.
"The pressure in this direction is high," said one person familiar with the work inside the ECB, speaking on condition of anonymity.
Asked about the possibility of making such purchases, an ECB spokesman said: "The Governing Council has taken no such decision."
The ECB's policymaking Governing Council could discuss the possibility of making such purchases at its December meeting, two of the four sources Reuters spoke to said. All four said such plans were being discussed.
The policymakers could decide at the December meeting to go ahead with the purchases, but such a step is not certain. Should the Council decide in December to proceed, the purchases on the secondary market could begin in the first quarter of 2015, one of the sources said.
The ECB began buying covered bonds on Monday, part of a private-sector asset-purchase programme that will also see it buy bundled loans known as asset-backed securities (ABS) later this year.
However, there is concern at the ECB that these measures may have an insufficient impact to help support the economy.
"In the view of many Governing Council members, the economic picture has recently taken a turn for the worse," one of the sources told Reuters. (Reporting by Andreas Framke, Eva Taylor and Paul Carrel; Editing by Hugh Lawson)
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