|€ Euro/USD$|Mid-Week Fundamental|Technical Analysis|Forecast
By midweek, the euro has recovered from its early-week slump and was trading at 1.1500 versus the US dollar. The EUR/USD pair regained its composure and recovers from Tuesday's fresh 2021 lows in the 1.1525/20 range. On Wednesday, the dollar's softening tone permitted a small comeback in the pair ahead of key US calendar data releases and amid falling cash market rates. Since the previous session's highs, the benchmark 10-year US Treasury yield has fallen to a range of 1.57 percent, a loss of around 6 basis points. Germany's 10-year Bund yield also fell, returning to the minus 0.12 percent area. In August, industrial production in Europe fell by 1.6 percent month on month but increased by 5.1 percent year on year.
The Consumer Price Index inflation figures, as well as the FOMC Minutes, will be hot issues in the United Kingdom's interest rate debate. Despite its recent rebound from a low of 1.1520, the euro-dollar exchange rate remains under pressure (October 12). As a result, the euro-dollar exchange rate is currently trapped at its 2021 lows, as dollar dynamics continue to dominate sentiment toward the European currency. Increased US rates and a firmer tone in the currency, as well as a rise in the dollar's value, have all worked to impair the risk universe's performance, as have times of risk aversion owing to inflation worries and oil shortages. Meanwhile, the growth forecast is harmed by growing anticipation that increasing prices may take longer to reverse.
The economy's recovery is likely to slow as a consequence of some deterioration in fundamentals, limiting the pair's upward potential. On Wednesday, the European Council will meet, followed by the EMU Trade Balance and German Final CPI. On Thursday, the EMU Industrial Production will be released (Friday). The region's economy is reviving in a patchwork fashion. The persistence of rising inflationary pressures Progression of the vaccination program and the variation of the Delta coronavirus Political effervescence is possible in connection to the European Stabilization and Growth Fund. Investing in European shares following the epidemic may help resurrect the euro. Rumors of an ECB taper have been around for a while. During Tuesday's US trading session, the EUR/USD currency pair plunged to 1.1524, its lowest level in 15 months, then recovered somewhat. Even so, declining US Treasury bond rates and a slight dollar depreciation are assisting the EUR/USD rebound rather than reigniting investor interest in the single currency in the US. As of the time of writing, the currency pair was trading slightly higher at 1.1550, up from earlier in the day's lows.
Francois Villeroy de Galhau, a member of the European Central Bank's Governing Council, warned investors on Tuesday that the conclusion of the Pandemic Emergency Purchase Program does not mean the end of the central bank's "extremely accommodating" policy. Villeroy emphasized that there is still a danger of missing the 2023 inflation goal, which would necessitate more monetary support.On the other hand, policymakers at the FOMC continue to convince investors that they will begin tapering asset purchases in November. President Raphael Bostic of the Atlanta Federal Reserve told the Financial Times that the US labor market downturn should not be used to justify the Fed's taper plan, highlighting the divergences between the European Central Bank and the Federal Reserve's forecasts for monetary and fiscal policy. "I believe that the considerable extra progress needed for our price-stability objective has been more than fulfilled, if not completely accomplished," Fed Vice Chair Richard Clarida said.
The September consumer price index (CPI) is projected to stay steady at 4% on an annual basis, which might be the final piece of evidence supporting the start of tapering next month. Although markets have already priced in the Fed's aggressive policy stance, if the CPI figure comes in higher than expected, investors may have to rethink the pace at which they cut their purchases. Additionally, these meeting minutes may demonstrate that policymakers are ready to overlook job issues in order to maintain price stability. By midweek, the euro had shaken off the negativity that had gripped the market earlier in the week, and the EUR/USD pair was back in the mid-1.1500s. After recovering from Tuesday's fresh 2021 lows, the EUR/USD has regained its calm and is again trading in the 1.1525/20 range. The pair rose somewhat on Wednesday as a result of the softer tone around the greenback, all ahead of Thursday's major economic data releases in the United States and despite falling cash market rates in the US. Indeed, the benchmark US 10-year yield has fallen to a range of 1.57 percent so far today, a loss of approximately 6 basis points from the previous session's highs. The yield on Germany's 10-year Bund decreased slightly, returning to minus 0.12 percent. Domestically, industrial production in the rest of Europe fell 1.6 percent month on month in August but rose 5.1 percent year on year.
In the United Kingdom, consumer price index (CPI) inflation figures will dominate the discussion, which will be supplemented by the release of the FOMC Minutes. Despite the EUR/USD pair's recent recovery from lows near 1.1520, it remains under strong pressure (October 12). For the time being, dollar dynamics continue to dominate market sentiment toward the euro, causing the pair to trade near or below its 2021 lows. Dollar strength, higher US yields, and bouts of risk aversion – exacerbated by inflation fears and the energy crisis – continue to weigh on the risk universe's performance, while growth expectations appear to be under pressure as rising speculation suggests that inflation will take longer than previously anticipated to reverse its current elevated levels. Furthermore, the pair's upside potential is limited by the predicted loss of economic momentum, as indicated by some deterioration in key indicators. The region's economic recovery has been patchy. The long-term feasibility of an inflationary rise The distribution of the Coronavirus Delta strain, as well as the frequency of vaccination efforts, are being actively studied. The EU Recovery Fund has the potential for political effervescence. As a result of the pandemic, investors are transferring their portfolios to European shares, which may provide extra support to the euro.
The Consumer Price Index inflation figures, as well as the FOMC Minutes, will be hot issues in the United Kingdom's interest rate debate. Despite its recent rebound from a low of 1.1520, the euro-dollar exchange rate remains under pressure (October 12). As a result, the euro-dollar exchange rate is currently trapped at its 2021 lows, as dollar dynamics continue to dominate sentiment toward the European currency. Increased US rates and a firmer tone in the currency, as well as a rise in the dollar's value, have all worked to impair the risk universe's performance, as have times of risk aversion owing to inflation worries and oil shortages. Meanwhile, the growth forecast is harmed by growing anticipation that increasing prices may take longer to reverse.
The economy's recovery is likely to slow as a consequence of some deterioration in fundamentals, limiting the pair's upward potential. On Wednesday, the European Council will meet, followed by the EMU Trade Balance and German Final CPI. On Thursday, the EMU Industrial Production will be released (Friday). The region's economy is reviving in a patchwork fashion. The persistence of rising inflationary pressures Progression of the vaccination program and the variation of the Delta coronavirus Political effervescence is possible in connection to the European Stabilization and Growth Fund. Investing in European shares following the epidemic may help resurrect the euro. Rumors of an ECB taper have been around for a while. During Tuesday's US trading session, the EUR/USD currency pair plunged to 1.1524, its lowest level in 15 months, then recovered somewhat. Even so, declining US Treasury bond rates and a slight dollar depreciation are assisting the EUR/USD rebound rather than reigniting investor interest in the single currency in the US. As of the time of writing, the currency pair was trading slightly higher at 1.1550, up from earlier in the day's lows.
Francois Villeroy de Galhau, a member of the European Central Bank's Governing Council, warned investors on Tuesday that the conclusion of the Pandemic Emergency Purchase Program does not mean the end of the central bank's "extremely accommodating" policy. Villeroy emphasized that there is still a danger of missing the 2023 inflation goal, which would necessitate more monetary support.On the other hand, policymakers at the FOMC continue to convince investors that they will begin tapering asset purchases in November. President Raphael Bostic of the Atlanta Federal Reserve told the Financial Times that the US labor market downturn should not be used to justify the Fed's taper plan, highlighting the divergences between the European Central Bank and the Federal Reserve's forecasts for monetary and fiscal policy. "I believe that the considerable extra progress needed for our price-stability objective has been more than fulfilled, if not completely accomplished," Fed Vice Chair Richard Clarida said.
The September consumer price index (CPI) is projected to stay steady at 4% on an annual basis, which might be the final piece of evidence supporting the start of tapering next month. Although markets have already priced in the Fed's aggressive policy stance, if the CPI figure comes in higher than expected, investors may have to rethink the pace at which they cut their purchases. Additionally, these meeting minutes may demonstrate that policymakers are ready to overlook job issues in order to maintain price stability. By midweek, the euro had shaken off the negativity that had gripped the market earlier in the week, and the EUR/USD pair was back in the mid-1.1500s. After recovering from Tuesday's fresh 2021 lows, the EUR/USD has regained its calm and is again trading in the 1.1525/20 range. The pair rose somewhat on Wednesday as a result of the softer tone around the greenback, all ahead of Thursday's major economic data releases in the United States and despite falling cash market rates in the US. Indeed, the benchmark US 10-year yield has fallen to a range of 1.57 percent so far today, a loss of approximately 6 basis points from the previous session's highs. The yield on Germany's 10-year Bund decreased slightly, returning to minus 0.12 percent. Domestically, industrial production in the rest of Europe fell 1.6 percent month on month in August but rose 5.1 percent year on year.
In the United Kingdom, consumer price index (CPI) inflation figures will dominate the discussion, which will be supplemented by the release of the FOMC Minutes. Despite the EUR/USD pair's recent recovery from lows near 1.1520, it remains under strong pressure (October 12). For the time being, dollar dynamics continue to dominate market sentiment toward the euro, causing the pair to trade near or below its 2021 lows. Dollar strength, higher US yields, and bouts of risk aversion – exacerbated by inflation fears and the energy crisis – continue to weigh on the risk universe's performance, while growth expectations appear to be under pressure as rising speculation suggests that inflation will take longer than previously anticipated to reverse its current elevated levels. Furthermore, the pair's upside potential is limited by the predicted loss of economic momentum, as indicated by some deterioration in key indicators. The region's economic recovery has been patchy. The long-term feasibility of an inflationary rise The distribution of the Coronavirus Delta strain, as well as the frequency of vaccination efforts, are being actively studied. The EU Recovery Fund has the potential for political effervescence. As a result of the pandemic, investors are transferring their portfolios to European shares, which may provide extra support to the euro.
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