EUR: ECB brings calm – Commerzbank
The Americans seem to have interpreted the deal between the US and China as significantly more positive for the US Dollar (USD) than the rest of the world, Commerzbank's FX analyst Volkmar Baur notes.
US labor market repor is likely to be canceled again
"At least, the trade-weighted USD gained around 0.8% yesterday between its low point in Asian trading after the end of the Trump-Xi meeting and the start of US trading at 1 p.m. German time. As a result, EUR/USD fell back below 1.16 and seemed to be heading straight for 1.15 until the ECB meeting stabilized the exchange rate."
"Christine Lagarde left the deposit interest rate unchanged at 2% and spoke of balanced risks, which suggests that the deposit rate will remain at 2% for the foreseeable future, as long as no accidents occur. Although this was not really new news, it seemed to be enough for the currency market yesterday to stabilize the exchange rate. Speculation about a possible further cut in the key interest rate is now likely to be off the table."
"Next week will be a little quieter in terms of data, particularly because the US government is still in shutdown and the US labor market report, which is normally published on the first Friday of each month, is likely to be canceled again. After seeing at least some movement in EUR/USD this week, things could calm down again next week, at least as long as politics does not throw a spanner in the works."
Author
FXStreet Insights Team
FXStreet
The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.
