The euro is showing little movement on Wednesday, as EUR/USD trades in the mid-1.13 line in the European session. On the release front, GfK German Consumer Climate continues to rise and met expectations. In the US, the markets are keeping a close eye on the FOMC Statement, which will be released later in the day.
The Federal Reserve will be in the spotlight on Wednesday, with the release of policy statement at the end of a two-day meeting. The Fed is expected to continue to counsel patience regarding an interest rate hike, and persistently weak inflation means the Fed can take its time before having to make a monetary move. The markets will be combing through the statement and any clues as to the timing of rate hike could shake up a listless EUR/USD.
It’s been strong week for German confidence indicators. GfK German Consumer Climate improved to 9.3 points, edging above the estimate of 9.2 points. The key indicator has now risen for four consecutive releases, as the German consumer remains optimism. This follows an excellent business confidence report. German Ifo Business Climate rose for a fourth straight month, hitting 106.7 points which matched the estimate. This marked a six-month high.
Greece remains in the headlines, as voters gave a sweeping mandate to the far-left Syriza party. Syriza ran on a platform of ending the crushing austerity scheme which Greeks have endured as part of the €240 billion bailout negotiated between and the EU, ECB and IMF. Syriza’s win certainly throws a monkey wrench into the Greek bailout program, but the new Greek government is likely to negotiate a deal with Greece’s creditors. A Greek exit from the Eurozone a most unlikely scenario. Indeed, Greek Prime Minister-elect Alexis Tsipras has promised to keep Greece in the Eurozone. Still, there remains plenty of uncertainty as to what will happen with the bailout plan, so traders can expect events in Athens to have a strong impact on the movement of the euro.
EUR/USD 1.1365 H: 1.1382 L: 1.1326
The Federal Reserve will be in the spotlight on Wednesday, with the release of policy statement at the end of a two-day meeting. The Fed is expected to continue to counsel patience regarding an interest rate hike, and persistently weak inflation means the Fed can take its time before having to make a monetary move. The markets will be combing through the statement and any clues as to the timing of rate hike could shake up a listless EUR/USD.
It’s been strong week for German confidence indicators. GfK German Consumer Climate improved to 9.3 points, edging above the estimate of 9.2 points. The key indicator has now risen for four consecutive releases, as the German consumer remains optimism. This follows an excellent business confidence report. German Ifo Business Climate rose for a fourth straight month, hitting 106.7 points which matched the estimate. This marked a six-month high.
Greece remains in the headlines, as voters gave a sweeping mandate to the far-left Syriza party. Syriza ran on a platform of ending the crushing austerity scheme which Greeks have endured as part of the €240 billion bailout negotiated between and the EU, ECB and IMF. Syriza’s win certainly throws a monkey wrench into the Greek bailout program, but the new Greek government is likely to negotiate a deal with Greece’s creditors. A Greek exit from the Eurozone a most unlikely scenario. Indeed, Greek Prime Minister-elect Alexis Tsipras has promised to keep Greece in the Eurozone. Still, there remains plenty of uncertainty as to what will happen with the bailout plan, so traders can expect events in Athens to have a strong impact on the movement of the euro.
EUR/USD 1.1365 H: 1.1382 L: 1.1326
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.