The Euro still trade under pressure against the US Dollar

Good Morning,

- Europe Week Ahead: ECB, BoE, EZ PMIs, German IP, UK PMI, ….but also U.S. NFP.

- The Euro still trade under pressure against the US Dollar, extending its decline to new low at 1.3119. Earlier on Friday’s morning, the German retail sales came well below expectations at -1.4% (0.1% expected) and alongside with solid US Chicago PMI, dragged down the cross.

-U.S. consumer sentiment also rose in August, while an index of current economic conditions hit its highest since July 2007, a survey released on Friday showed. The Thomson Reuters/University of Michigan's final August reading on the overall index on consumer sentiment came in at 82.5, up from 81.8 the month before.

-SNB’s Jordan Says Franc Cap Needed as Risks Grow, NZZamS Reports. “The environment has deteriorated for Switzerland,” he said. “New geopolitical risks have arisen and the international economic data -- particularly in Europe and South America -- was worse than we expected.” The Zurich-based central bank set a ceiling of 1.20 per euro on the franc three years ago to ward off deflation and a recession. That limit remains crucial, Jordan said, as an appreciation of the franc would heighten the risk of negative price growth.

- Spiegel : German news magazine reported on Sunday that Chancellor Angela Merkel is unhappy with European Central Bank chief Mario Draghi for apparently proposing a greater emphasis on fiscal stimulus over austerity in order to boost growth in Europe. Der Spiegel reported, without citing any sources, that she and Finance Minister Wolfgang Schaeuble had both called the ECB president last week to take him to task about comments he made in a speech at Jackson Hole, Wyoming on Aug 22.

- Credit Suisse on EUR/USD: We stay bearish and look for the break below the 1.3153 recent low for further downside to the September low at 1.3104 next, followed by 1.3020/15 ‒ the 50% retracement, 78.6% retracement of the 2013/2014 uptrend and measured target from the top. While we would expect stronger support here, a direct break below can see 1.2994. Near-term resistance shows at 1.3221, through which should see a small base for a move back to 1.3261. Above 1.3298 is needed to ease to mark a more concerted correction. CS maintains a short EUR/USD following 1.3225 break targeting 1.3025.

- The Canadian Dollar remained the best performing currency against the US Dollar the previous week, rising almost 1% just before weekly closing.

- French PM Valls says the ECB must go “even further” to correct the overvalued euro.. “Speaking this morning at a Socialist party gathering in La Rochelle said the ECB’s decision to cut interest rates in June was a “strong signal” but more was needed.”

-NZD firms as terms of trade unexpectedly rise

-RUB leads Eastern European currencies lower as Ukraine worsens

-China August PMIs slow, but remain over 50. Therefore, AUD gains steadily, but remains below Friday’s opening levels

- Six G10 central banks to hold meetings this week! RBA (Tue), Bank of Canada (Wed), BoJ, ECB, Bank of England and Riksbank (Thu).

- Watch today: German GDP, Eurozone PMI, UK Monetary data.

Have a great Week!