Eur/usd - page 327
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EUR/USD got negative data on both sides which led to a drop but I suspect that the market will have a huge impact still before Thursday.
EUR/USD: Euro Hovers Below $1.13 as Market Readies for Fed
The shared European currency erased overnight gains on Wednesday but remained in a tight range, as traders position for the Federal Open Market Committee (FOMC) outcome tomorrow.
Euro traders will be keen to see euro zone inflation figures for August, with the CPI expected to have improved to 0.0% from -0.6% in the previous month, while on an annual basis it is expected to remained unchanged at 0.2%.
The euro added 0.03% to $1.1269, retreating from the session's high of $1.1298.
Market sentiment is dominated by the expectation of the Federal Reserve (Fed) resolution on Thursday. US data are being put under scrutiny for late clues on the FOMC's thought process. There continues to be a divergence between healthy consumer spending and soft industrial production, weighed down by the high USD.
In the previous session US retail sales came out slightly upbeat, while industrial production continued to struggle.
In a research note from analysts at ANZ they wrote that "solid consumer spending indicates positive domestic momentum and this saw yields rise across the curve, with both treasuries and equities going up."
The US session will also offer up the latest UP CPI figures for August, which might shuffle the sentiment for the last time before the Fed decision. The index is expected to grow 0.2% on an annual basis in August.
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Euro recorded a second consecutive loss against the dollar on Tuesday. Bearish trend prevailed throughout the session and as a result of this the support at 1.1290 was broken in the early hours. It’s most expected that the downward direction of the pair to continue until reaching the key level at 1.1180. Trading on Tuesday started at a rate of 1.1315, EUR lost 48 pips and bottom of the day was hit at 1.1258.
Yesterday the EURUSD pair fell on a narrow range day and closed in the red near the low of the day, shy above the 10-day moving average. A close below the 10-day moving average may suggest a more aggressive pullback. The key levels to watch today are the same of yesterday 1.1495 (Resistance) and 1.1237 (Support). FOMC meeting just around the corner.
EUR/USD: Euro Books Moderate Gains as US Inflation Disappoints
CPI in the US for August decreased from 0.1% to -0.1% month-on-month and the yearly print came out at 0.2%. Meanwhile, the core gauge on a monthly basis remained at 0.1%, while year-on-year it remained at 1.8%, the Bureau of Labor Statistics informed market participants on Wednesday.
The dollar was pretty inactive right after the release, and the figures are unlikely to change the Federal Reserve's (Fed) decision, with the Federal Open Market Committee (FOMC) meeting starting today and concluding on Thursday.
The pair was seen off the daily lows, changing hands at around $1.1300 and up 0.40% higher on the day, booking careful gains.
Earlier in the session, CPI from the euro zone for August posted a sharp rise from -0.6% to 0.0% month-on-month, while the yearly change decreased from 0.2% to 0.1%. The same applied for the core gauge on a yearly basis, which also shed 0.1% to 0.9%.
"It still seems most probable that the euro zone will avoid renewed deflation and that consumer price inflation will trend gradually up from the final months of 2015 - due to base effects, expected ongoing (albeit relatively modest) euro zone growth and the relatively weak euro," Howard Archer, chief UK + european economist at IHS Global Insight, said regarding the CPI.
On Tuesday, US retail sales for August decreased to 0.2% from a revised 0.7% month-on-month, while the control core gauge ticked higher from 0.3% to 0.4%. Moreover, retail sales ex auto dropped to 0.1% from a revised 0.6% previously.
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EUR/USD is trading inside of yesterday range and tomorrow is the big day for the interest rate.
GLOBAL MARKETS-Stocks rise, dollar falls before Fed rate decision
Global stock prices rose for a second day on Wednesday as investors awaited whether the U.S. Federal Reserve would raise interest rates, while the dollar fell on a surprise fall in domestic inflation in August.
Short-term U.S. bond yields retreated from a near 4-1/2 year high and gold prices rose as a 0.1 percent fall in the Consumer Price Index in August reduced expectations the U.S. central bank would raise interest rates for the first time since 2006.
Brent crude prices in London jumped 4 percent on a drop in U.S. crude inventories in the latest week.
"Hopes for a Fed rate hike Thursday grew a bit slimmer after another tame reading of U.S. inflation," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
Subdued domestic inflation is seen as a critical factor among some economists, together with the recent global market turbulence, that could cause the Fed to stick to its near-zero interest rate policy at its two-day meeting when it ends on Thursday.
Steady jobs growth and falling unemployment, on the other hand, might be enough to tip U.S. policymakers to raise rates.
A Reuters poll released on Wednesday suggested a rate hike remains a close call, although a little more than half the 80 economists surveyed reckoned the Fed will refrain from raising rates.
U.S. money market rates, however, implied traders see a little more than a 1 in 4 chance of a rate increase on Thursday.
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Yesterday the currency went back and forward with a wide range day but managed to close in the green near the open of the day, above the 10-day moving average.
Today is the big day, where the FOMC meeting ends and the Fed releases its interest rate decision at 18:00 (CET) and gives its monetary policy statement and press conference at 18:30 (CET). These events are a game changer and will let us know themed to long term direction of the market.
The key levels to watch today are the same of yesterday 1.1495 (Resistance) and 1.1237 (Support).
The euro recorded a minimal increase against the dollar. The negative sequence of the single currency was interrupted, but the pair remained at the lower levels. If short-term expectations justify the correction of the price will continue, bullish sentiment will become more intense and currencies will make a test of resistance at 1.1430. Wednesday session was relatively calm, and the pair ranged in a narrow range. The session started at a rate of 1.1267 and ended 22 pips higher. Peak of the day was reached at 1.1319.
EUR/USD: Traders Ready for FOMC Decision, Pair Above $1.13
The pair was seen jumping above $1.13 on Thursday, ignoring fresh jobless claims and housing starts data, in what appears to be nervous trading as the Federal Open Market Committee (FOMC) meeting concludes today.
In the US, 264,000 people applied for the first time for unemployment benefits in the week ending September 12, the lowest level since the period of July 18, while analysts expected an unchanged reading of 275,000.
Builders broke ground on 1.126 million sites in August, which was less than the 1.163 million starts the markets were expecting, as well as 3% lower than the revised 1.161 million starts in July.
The Federal Reserve is likely to delay the lift-off, according to the latest pricing from the fed funds futures, showing only 30% odds for raising rates today. Investors will focus on fresh economic projections, along with the so-called dot plot.
Volatility is likely to be much higher after the decision, as traders will be repositioning their portfolios.
From the macro point of view, Wednesday brought inflation figures from both the US and the euro zone. CPI from the euro zone for August posted a sharp rise to 0.0% from -0.6% month-on-month, while the yearly change decreased from 0.2% to 0.1%. The core gauge on a yearly basis also shed 0.1%, to 0.9%.
CPI in the US for August decreased from 0.1% to -0.1% month-on-month and the yearly print was unchanged at 0.2%. Meanwhile, the core gauge was unchanged on both a monthly and year-on-year basis, remaining at 0.1% and 1.8% respectively, the Bureau of Labor Statistics informed market participants on Wednesday.
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