The Euro continues falling. Overview for 05.02.2021

Bearish pressure on EURUSD continues on Friday; market players are rooting for the “greenback”.

They continue selling the major currency pair at the end of the first February week. The current quote for the instrument is 1.1960.

Market players are still rooting for the USD and against the Euro due to the weak macroeconomic statistics published by the alliance and its members. Another reason is a gloomy economic outlook due to lockdowns in Europe. 

The statistics published by the USA yesterday indicated that the weekly Unemployment Claims report showed 779K after being 812K the week before and against the expected reading of 828K. it’s a very good number and a positive signal for the American economy.

The Factory Orders showed +1.1% m/m in December against the expected reading of +0.7% m/m. by the way, the November data was revised upwards, +1.3% m/m, which is also quite good. The Construction Spending also boosted and added 1.0% m/m in December against the expected reading of +0.8% m/m, and that’s also good.

Today’s an important day as the USA continues reporting on its labor market for January. The Unemployment Rate is expected to remain at 6.7%, while the Non-Farm Employment Change may show 85K after losing 140K in December, which may yet be revised upwards. The Average Hourly Earnings indicator is expected to add 0.3% m/m after expanding by 0.8% m/m the month before.

The more stable the numbers, the better for the USD.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Euro is rising a little bit. Overview for 09.02.2021

EURUSD has changed its direction; the asset is trying to recover.

The major currency pair is “in the black” on Tuesday. The current quote for the instrument is 1.2080.

Positive market sentiment about the upcoming stimulus measures from the US government is slowly fading away. it’s quite clear that the Democratic party will one way or another pass the $1.9 trillion COVID-19 stimulus plan but not earlier than the special unemployment benefits program expires. It means that the plan won’t get anywhere until at least March 15th. In this light, investors are correcting their USD positions.

The statistics published by the Euro Area yesterday were surprisingly weak. The Sentix Investor Confidence showed -0.2 points in February after being 1.3 points in January and against the expected reading of 4.1 points. However, where else can the confidence go when consumers in some European countries are restricted in their movements due to the lockdown?

The German Industrial Production report for December was pretty bad – the indicator showed no changes after adding 1.5% m/m the month before and against the expected increase by 0.1% m/m. 

There are no European statistics in the macroeconomic calendar apart from the German Trade Balance. In the afternoon, the USA is scheduled to report on the NFIB Small Business Index, which is expected to rise in January. However, this indicator is minor and won’t have any significant influence on EURUSD.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Euro has reached its two-week highs. Overview for 11.02.2021

EURUSD keeps its positive momentum and intends to continue rising.
The major currency pair remains optimistic on Thursday. the current quote for the instrument is 1.2120.

The Consumer Price Index in the USA showed 0.3% m/m in January, the same as expected, after being 0.4% m/m in December. On YoY, the indicator was 1.4% against 1.5% over the same period of time. The Core CPI remained unchanged, although it was expected to show 0.2% m/m.

Market players had been waiting for the statistics on inflation for a long time: the report might have been another reason for US Congress to approve the stimulus plan for the country’s economy. The plan will be approved anyway but more reasons in favor of it will only help. In the next several months, there might be a local increase in the price pressure but it should influence Congress’ stance. There are other factors, such as the weak employment sector, which prevents salaries and wages from growing.

In this speech last night, the US Federal Reserve Chairman Jerome Powell said that the regulator’s attitude towards the global stimulus plan remained unchanged – it would stay the same until the economy recovered completely, which means that the Fed’s interest rates have nothing to worry about for quite some time. Apart from everything else, the regulator signaled on several occasions in the past that inflation might exceed the target level of 2% but it was okay because the country’s economy should try to recover by itself.

It was no news for the “greenback”, that’s why EURUSD continued moving towards balancing.

Later in the evening, the USA is scheduled to report on the Unemployment Claims for the previous week, which may support the USD.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Euro continues growing. Overview for 15.02.2021

Early in another February week, EURUSD is rising and wants to keep its positive momentum.

The major currency pair is “in the black” on Monday, while today’s trading session is expected to be calm. The current quote for the instrument is 1.2138.

The USA is celebrating President’s Day, so financial markets aren’t active there.

Among the reports scheduled for today, one should pay attention to the Industrial Production in the Euro Area, which is expected to lose 0.4% m/m in December after adding 2.5% m/m the month before. In addition to that, the Eurogroup Meetings are starting today and the German Central Bank is planning to publish its Monthly Report.

Market layers continue keeping a close eye on the approval of the $1.9T stimulus plan in the USA. The procedure is going pretty fast but the plan won’t be implemented at least until March 15th, when some of the previous programs are over.   

The statistics published by the USA last Friday showed the preliminary reading on the Consumer Sentiment from the University of Michigan, which dropped to 76.2 points in February after being 79.0 points in January and against the expected number of 80.0 points, and that’s the lowest reading over the last six months. The components of the report show that the consumer expectations and the current conditions went from 74.0 and 86.7 points to 69.8 and 86.2 points respectively.

One of the probable reasons for the degradation of the situation with household income. If so, it’s a pretty huge risk for the American economic recovery outlook.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Euro lost to the USD. Overview for 17.02.2021

EURUSD fell on Wednesday; the “greenback” is feeling confident again.

The major currency pair was looking pretty stable but the market sentiment quickly changed. The current quote for the instrument is 1.2065.

Nothing terrible has happened but market players are once again paying attention to what is happening in Germany and analyzing everything that has something to do with the largest economy in Europe. Yesterday, Peter Altmaier, the German Minister for Economic Affairs and Energy said that the country’s economy would prosper and flourish if there was the third wave of the coronavirus pandemic. He sounded quite logical: it’s no use canceling the quarantine restrictions because this act may result in a new wave of the disease. Altmaier also said that the government was well aware that the German businesses badly needed the lockdown to be canceled but would be very careful with it.

In the nearest future, German authorities are going to consider more measures to help national companies, for example, they have already let the companies with annual sales of over €750K apply for grants. Earlier, there was a restriction that didn’t allow such big companies to receive grants from the government.

The fact that Germany is removing the quarantine restrictions very slowly is putting pressure on the country’s economy, as well as the Euro.

The Euro Area GDP report turned out to be better than expected: it showed -0.6% q/q against the expected reading of -0.7% q/q, although it didn’t make investors more optimistic – the indicator remained negative. 

Today, market players will focus their attention on the Retail Sales data for January from the USA and everything that is related to it. Forecasts are pretty optimistic and may support the “greenback”.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

EURUSD is too active. Overview for 19.02.2021

EURUSD managed to recover after plunging earlier; the asset remains volatile at the end of the week.

On Friday morning, the major currency pair is looking rather neutral despite its volatility, which makes market players nervous. The current quote for the instrument is 1.2095.

The “greenback” owes its strength to the rise of US bonds on the debt market.

The weekly Unemployment Claims data wasn’t good: the indicator showed 861K after being 848K the week before and against the expected reading of 775K. The labor market remains rather complicated and the numbers confirm it.

The January readings on the real estate market also were rather mixed. For example, the Building Permits showed 1.88M after being 1.7M the month before, while the Housing Starts reported at 1.58M after being 1.68M in December. It means that construction companies are still not quite sure about the demand in the future despite low interest rates.

There will be a lot of interesting statistics today. Both the Euro Area and the USA are scheduled to report on the Manufacturing and Services PMIs for February, which are expected to improve a little bit. Later, the USA will publish the Existing Home Sales data, which may reduce a bit.

In the evening, the US Fed will release its Monetary Policy Report that is expected to contain information about additional stimulus measures to support the American economy, as well as the whole economic situation outlook.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Pound renewed two-years’ highs. Overview for 23.02.2021

The British pound in pair with the US dollar looks impressively strong, the current quotation being 1.4069.

The key support factor here is the aggressive anti-coronavirus vaccination campaign in Great Britain. The population is vaccinating willingly, and the more British people get the vaccine, the more sure the market becomes that the economy will soon get back to normal.

The statistics published today showed a decrease in the number of unemployment claims in January by 20 thousand against the forecast growth by 13.8 thousand and the previous value of 7 thousand.

Average monthly earnings in October-December grew by 4.7% against the preceding growth by 3.6% and the forecast of 4.1%.

A bit later, we will see the unemployment statistics for December. The forecast suggests growth to 5.1% from 5.0% previously. However, as long as the market is generally positive, even weak statistics will be taken normally.

Meanwhile, the Cabinet of the UK is working on the strategy of the escape from lockdowns and isolation. All decisions will be made based on the current situation with the immunity establishment and the vaccination campaign in order not to destroy the positive effect reached by now.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Euro is slowly rising. Overview for 25.02.2021

EURUSD found a reason to grow and intends to keep its positive momentum on Thursday.

On Thursday morning, the major currency pair is keeping its positive momentum that started last night. The current quote for the instrument is 1.2177.

The USD remains under slight pressure after the Fed’s comments that its soft monetary policy may continue as long as the country’s economy requires. No one really thought that the stimulus program would be over soon but the regulator’s saying it out loud worked against the “greenback”, as usual.

Later in the afternoon, market players should pay attention to the US GDP report for the fourth quarter of 2020. Average expectations imply 4.2% q/q, which is a bit better than the previous estimate. However, it may well be that the American economy is recovering a bit slower than expected. In this case, the USD will get under pressure again.

Apart from this, the USA is scheduled to report on the Durable Goods Orders in January, which may continue improving. It’s a good mid-term signal for the economy showing consumer activity. Also, it may be important and interesting to see the weekly Unemployment Claims report: last week, the indicator was an unpleasant surprise, so this time it is expected to correct.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

EURUSD plunged. Overview for 01.03.2021

Early in spring, EURUSD is looking rather weak amid active demand for risks on the market.

The major currency pair is rather unimpressive and weak on Monday. The current quote for the instrument is 1.2050.

The key trigger of the USD strengthening was the US 10-year bond yield, which reached this year’s high. It is happening due to aggressive anti-coronavirus campaigns all over the world, which made investors believe that American inflation would boost and the US Federal Reserve might get rid of its stimulus programs much earlier than it was thought before.

It’s quite clear that all this is just predictions and expectations but financial markets like it.

Today’s data from the Euro Area is quite nice so far, thus decreasing pressure on the Euro a little bit. For example, the final report on the Manufacturing PMI showed 57.9 points against the previous estimate of 57.7 points. The same indicator for Germany was 60.7 points against the previous reading of 60.6 points.

Later in the evening, the ECB President Lagarde is scheduled to speak and market players should definitely listen to her estimations of the current economic state of the Euro Area.

The USA is planning to report on the Manufacturing PMI from both ISM and Markit for February, as well as the Construction Spending for January and the Manufacturing Prices for February.

The key American statistics are planned for the first Friday of the month, as usual. It will be a bunch of reports on the labor market for February.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

EURUSD remains active. Overview for 03.03.2021

EURUSD reached stability on Wednesday after a volatile trading session the day before but investors do not relax.

The major currency pair had a pretty volatile Tuesday evening but is looking quite calm on Wednesday morning. The current quote for the instrument is 1.2080.

EURUSD was extremely active amid the total lack of important statistics from the USA, and this activity was caused by the comments of monetary policymakers. For example, the FOMC Member Lael Brainard said that American economic prospects were looking quite positive because the vaccination campaign was pretty aggressive, thus implying a quick defeat of the coronavirus pandemic. However, it doesn’t mean that the Fed will get rid of its stimulus programs soon.

Of course, Brainard admitted that onу day the American regulator would have the opportunity to revise its rates upwards but it would be rather slow. In the meantime, the programs will continue as expected until the Fed sees solid progress in achieving its goals.

Market players are very responsive to any information about a possible closure of American stimulus measures earlier than was expected. That’s why any reference to the fact that the regulator is not going to terminate its programs ahead of the game provokes stormy reactions.

Later today, the Euro Area and Germany are planning to publish the final report on the Services PMI for February, which is not expected to change much. However, the most interesting will happen later: the USA is starting to report on its labor market and the first indicator is going to be the ADP Non-Farm Employment Change, which may show 203K after being 174K the month before. The bigger the reading, the better for the USD.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The USD rose significantly. Overview for 05.03.2021

The major currency pair remains weak on Friday after Jerome Powell’s comments.

EURUSD remains under pressure at the end of the first week of March. The current quote for the instrument is 1.1926.

Yesterday, investors focused their attention on the speech to be delivered by the US Federal Reserve Chairman Jerome Powell. And it turned out it wasn’t in vain.

Powell said that the American labor market would have to go a long way to recovery but it should start improving yet today. The regulator is planning to actively study the sector health but even after unemployment reaches 4% it will be too early to say that the target is reached. Powell believes that the labor market is very unlikely to reach its balance this year.

According to Powell, before the pandemic, the American economy was much closer to the regulator’s inflation target. When the economy revives and opens its borders, inflation in the country will boost but it’s too early to make any inflation forecasts.

Powell ended his detailed and insightful speech in a positive way by saying that the US economy had excellent grounds for a better tomorrow.

The statistics published yesterday showed that the Unemployment Claims was 745K this week after being 736K the week before and against the expected reading of 758K.

Today is an important day when it comes to the numbers from the USA. Later in the evening, the country will continue reporting on its labor market, but the numbers are not expected to be too strong. However, any readings better than expected will be positive for the USD.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.