The Euro may be vulnerable to deeper losses if German GDP and regional PMI figures are revised lower, fueling speculation about a looming expansion of ECB stimulus.

Talking Points:

  • New Zealand Dollar Gains as Terms of Trade Data Boost RBNZ Policy Bets

  • Euro May Continue Lower if German GDP, EZ PMI Revisions Disappoint

  • See Economic Releases Directly on Your Charts with the DailyFX News App

The New Zealand Dollar narrowly outperformed in otherwise quiet overnight trade, rising as much as 0.2 percent on average against its leading counterparts. The move followed an unexpectedly upbeat Terms of Trade report. The ratio of export vs. import prices rose 0.3 percent in the second quarter, topping bets calling for a 3.5 percent decline. The improvement in the island nation’s external position appeared to bolster RBNZ monetary policy bets, with the Kiwi rising alongside New Zealand’s benchmark 10-year bond yield.

Looking ahead, a busy European data docket is headlined by the final revisions of second-quarter German GDP data and Augusts’ Eurozone Manufacturing PMI print. The former release is expected to confirm that output in the Euro area’s top economy shrank 0.2 percent in the three months through June, marking the first contraction in over a year. The latter is seen matching preliminary estimates showing manufacturing- and service-sector activity in the currency bloc grew at the slowest pace in 13 months.

Eurozone economic news-flow has increasingly deteriorated relative to consensus forecasts since the beginning of the year. Indeed, data from Citigroup suggests realized outcomes are underperforming economists’ bets by the widest margin since June 2013 as of last week. That suggests analysts continue to underestimate the degree of economic slowdown in the region, opening the door for additional downside surprises. Disappointing results on today’s releases may help stoke speculation about a forthcoming expansion of ECB stimulus at this week’s policy meeting, sending the Euro lower. We remain short EURUSD.

FXCM, L.L.C.® assumes no responsibility for errors, inaccuracies or omissions in these materials. FXCM, L.L.C.® does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. FXCM, L.L.C.® shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD holds above 1.0700 ahead of key US data

EUR/USD holds above 1.0700 ahead of key US data

EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground. 

EUR/USD News

USD/JPY stays above 156.00 after BoJ Governor Ueda's comments

USD/JPY stays above 156.00 after BoJ Governor Ueda's comments

USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.

USD/JPY News

Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus

Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus

Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.

Gold News

Sei Price Prediction: SEI is in the zone of interest after a 10% leap

Sei Price Prediction: SEI is in the zone of interest after a 10% leap

Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.

Read more

US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets

US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets

The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase. 

Read more

Majors

Cryptocurrencies

Signatures