Euro/USD Weekly Overview for July 8-12

The Euro/USD currency pair dropped again during last week. The ECB rate decision and slightly better than expected U.S non-farm payroll report may have contributed to the recent decline of Euro USD.  Will the Euro USD continue to trade down this week? On this week’s agenda: Euro Group meeting, ECB president testimony, minutes of  the FOMC meeting, Bernanke’s speech, France’s industrial production, U.S PPI,  and U.S. jobless claims.  Here is a short overview for the Euro/USD currency pair for July 8th to July 12th

Forex Market July Update:

The Euro to USD fell by 1.39% during last week the Euro/USD reached by Friday 1.2829 – the lowest level since the beginning of April; during June-July, the Euro /USD slipped by 1.31%.

Correlations among Currencies–July Update

The table below presents the updated linear correlation (moving correlation) among the Euro/USD and other leading currencies pairs during June and July (daily percent shifts).

EURO USD Linear Correlation Currencies Pairs For June-July 2013 July 12As seen in the table above, the strong correlations among the Euro/USD and other currencies including with GBP/USD and USD/CHF suggest the developments of the Euro/USD in recent weeks could affect these currencies pairs’ paths.

See here a short outlook of gold and silver prices.

Euro/USD Weekly News Outlook (the full weekly market overview is herein)

Monday, July 8th

  • All Day – Euro-Group Meeting: The ministers of finance will convene in Brussels. They are expected to talk over Greece’s economic situation in anticipation for the next bailout;
  • 13:30 – ECB President testifies: Mario Draghi will testify in front of the Committee on Economic and Monetary Affairs of the European Parliament, in Brussels. He will also testify on the EU economy at the quarterly hearing of this Committee. If Draghi will provide some insight behind the future steps of the ECB’s monetary policy, this testimony could affect the Euro USD exchange rate;

Tuesday, July 9th

  • All Day – ECOFIN Meeting: In this meeting, the EU ministers of finance will focus on the economic changes in EU;

Wednesday, July 10th

  • 08:45 – French Industrial Production:. In the previous meeting, the industrial production increased by 2.2% during May; if this trend will persist it could pull up Euro USD currency pairl
  • 19:00 – Minutes of the last FOMC Meeting: Following the previous FOMC meeting, in which the Fed left its monetary policy unchanged; the upcoming minutes could shed some additional light behind the future plans of the Fed. If the minutes will further suggest the Fed is considering easing down the current asset purchase program in the coming months, this could pull up the USD;

Thursday, July 11th

  • 09:00 – ECB Monthly Bulletin: This monthly report for June analyzes the economic changes of the Euro Area such as the price stability, interest rate decisions and governments’ debt;
  • 13:30 – U.S. Jobless Claims:  in the last report the jobless claims fell by 5k to reach 343k; this upcoming weekly report may affect the U.S dollar and consequently commodities and equities markets;

Friday, July 12th

  • 13:30 – U.S. PPI: In the previous report regarding May, this index for finished goods rose by 0.5% compared with April’s level and the core PPI by 0.1%; this news might affect the USD; 

Euro USD Weekly Outlook

The Euro/USD tumbled down again during last week mainly following the ECB rate decision and Draghi’s speech about keeping rates low in the near future. The ongoing weakness of the EU economy on the one hand, and the slow and steady progress of the US economy on the other is likely to further drag down the Euro USD exchange rate in the coming week. The upcoming minutes of the FOMC meeting could stir up the forex market again if the minutes will shed some light on the future plans of the FOMC, which could drag down the Euro USD. The upcoming US reports including PPI and jobless claims could affect the direction of the Eur USD. Finally, the upcoming EU reports including ECB bulletin and French industrial production could affect the strength of the Euro.

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