Analysts at MUFG Bank, see the EUR/USD pair with a neutral bias for next week, moving in the range of 1.0950 - 1.1250.
Key Quotes:
“The euro has broken lower against the US dollar this week. The key factor behind this has been mounting concerns over global growth. Initially the euro had been trading in a range against the dollar of around 1.1175 to around 1.1225 until German GDP data revealed that Europe’s largest economy had contracted in the 2nd quarter, and that China’s industrial production had fallen to 17-year lows.”
“President Trump’s temporary tariff reprieve was unable to boost risk appetite substantially and the US Treasury curve has inverted along the 2-year and 10-year tenors. The Fed’s recent emphasis on the global economy suggests that building risk factors could weigh on
their rate guidance, which could weaken the dollar. But in this risk-off environment it seems more likely that the dollar will be supported. Jackson Hole will be a key event to watch for signs that Fed Chair Powell may change his stance.”
“Comments by ECB Governing Council member Olli Rehn which suggest that the ECB could deliver a package of stimulus measures which could overshoot the market’s expectations, will continue to weigh on the euro. Rates markets are now pricing in a 75% chance of a 20bps cut in the deposit rate by September.”
“In terms of data, next week Eurozone inflation for July is expected to have been negative in July and slow in Y/y% terms. Even on an upside surprise, the euro is unlikely to find support.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0850 on renewed USD strength
EUR/USD stays under modest bearish pressure and declined toward 1.0850 in the early European session on Tuesday, pressured by the renewed USD strength. ZEW sentiment survey will be featured in the European economic docket ahead of housing data from the US.
USD/JPY extends rally beyond 150.00 as markets assess BoJ decisions
USD/JPY preserves its bullish momentum after breaking above 150.00 with the 'sell the fact' reaction to the Bank of Japan's decision to end negative interest rates. In the post-meeting press conference, Governor Ueda said they will consider options for easing broadly, including ones used in the past if needed.
Gold price hangs near one-week low, looks to Fed decision on Wednesday for fresh impetus
Gold price struggles to capitalize on the previous day's bounce from the $2,145 region and oscillates in a range during the Asian session on Tuesday. Hawkish Fed expectations, elevated US bond yields and a bullish USD cap the upside.
Why is the crypto market crashing?
The two most important contribution to the ongoing bull market is the meteoric rise in Bitcoin due to the ETF approval and the sudden interest spike in Solana ecosystem. But the recent move suggests that the upward momentum is dissipating and a correction looms.
Lots of tension ahead of this week's Fed decision
Last week, we got a strong round of US economic data accompanied by hotter US inflation reads. The takeaway of course is that there might be a lot more pressure on the Fed to be looking to scale back its rate cut outlook at this week’s meeting.