According to Jane Foley, senior FX strategist at Rabobank, speculation that the German economy is poised to drop into technical recession is likely limit the ability of EUR/USD to climb significantly away from the 1.10 area in the coming weeks.

Key Quotes

“The EUR has been one of the worst performing G10 currency on a one month view and in light of the economic clouds over the German economy we expect the EUR to remain under pressure at least into the end of the year.”

“Next week investors will turn their attention towards the September 18 FOMC and the anticipated rate cut from the Fed. If Chair Powell is able to lift investor confidence, the USD could move lower as funds move towards EM and riskier high yielding assets. That said, the sustainability of any such move will largely depend on the perceived level of trade tensions between the US and China and the progress of talks between the two governments into October and beyond.”

“Although this week has brought indications of a softening in the stance of both the US and the Chinese governments on the trade front, clearly there is risk of disappointment with neither government having an incentive to back away from a tough stance.”

“Overall we anticipate that tensions on some levels between the US and China are likely to linger. This outlook combined with fears relating to the slowing global economy are likely to ensure that demand for dollar remains at healthy levels. Although there is clear risk of volatility in EUR/USD on the back of both the ECB and Fed policy meetings, on balance we expect EUR/USD to hold close to the 1.10 area on a 1 to 3 month view.”

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD hovers around the 34-months lows amid growth concerns

EUR/USD is trading below 1.0850, just above the lowest since April 2017. Concerns about eurozone growth are weighing on the common currency. Markets are watching coronavirus developments. 

EUR/USD News

GBP/USD shrugs off Brexit concerns and holds its ground

GBP/USD is trading around 1.3050, little-changed. The French foreign minister warned of acrimonious Brexit talks as the UK's chief negotiator is laying down a tough stance. 

GBP/USD News

Forex Today: Coronavirus fears persist, Japanese economy squeezes, cryptos climb down

China has announced it will stimulate the economy in the face of the coronavirus outbreak, including lower corporate taxes and increased spending. While most factories have returned to work, Beijing has tightened restrictions on movements in the Hubei province.

Read more

Gold slips below $1580 level amid improving risk sentiment

Gold retreats from two-week tops amid receding demand for traditional safe-haven assets. The precious metal failed to capitalize on its recent positive move to near two-week tops and edged lower during the early European session on Monday amid fading safe-haven demand.

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex MAJORS

Cryptocurrencies

Signatures