Euro/USD Weekly Overview for June 24-28

The Euro/USD changed direction and fell last week but remained slightly above the 1.3 mark. Last week’s FOMC policy meeting ended with Bernanke hinting the Fed may ease down QE3 in the coming months if the US economy will keep progressing. This news may have been the catalyst that strengthened the US dollar against leading currencies including the Euro. On this week’s agenda: U.S consumer confidence, US new home sales, EU economic summit, EU monetary development, U.S GDP for Q1 (final estimate), German retail sales, and U.S. jobless claims. 

 Here is a short overview for the Euro/USD currency pair for June 24th to June 28th

Forex Market June Update:

The Euro to USD fell by 1.7% during last week to reach by Friday 1.3122; during the month, the Euro /USD increased by 0.93%.

Correlations among Currencies– June Update

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

EURO USD Linear Correlation Currencies Pairs For May-June 2013 June 24As seen, the strong correlations among the Euro/USD and other currencies including with GBP/USD and USD/CHF suggest the developments of the Euro/USD during the week could affect these currencies pairs’ path.

To see the developments in the gold and silver markets see here.

Euro/USD Overview for the weekly news (the full weekly market overview is herein)

Tuesday, June 25th

  • 15:00 – U.S Consumer Confidence: in April, the consumer confidence index rose to 76.2 (M-o-M). The current expectations are that the April index may continue to rise;
  • 15:00 – U.S. New Home Sales: in the previous report (opens pdf; for April), sales of new homes slightly rose to 454,000 – a 8.8% gain (month over month); if the number of home sales will continue to increase, it may provide a sign of recovery in the U.S real estate market; this news may also affect the USD;

Wednesday, June 26th

  • 13:30 – Third Estimate of U.S GDP for 1Q 2013: In the first estimate the U.S GDP rose by 2.5% in the first quarter; in the fourth quarter the GDP grew by 0.4%. If there will be a sharp change in the growth rate from second to the third Q1 estimate, this could affect US dollar;

Thursday, June 27th

  • 09:00 – Euro Area Monetary Development:. In the recent April report, the annual growth rate for M3 rose to 3.2%; M1 increased to 8.7%. Finally, the annual growth rate of loans to private sector reached -0.9%. This news suggests the EU inflation might start to pick up even though loans continue to dwindle;
  • Two Days – EU Economic Summit: In this summit, the EU ministers of finance will focus on unemployment including youth unemployment in EU. Considering Germany’s elections in September, the big decisions are likely to be made at the end of the year;
  • 13:30 – U.S. Jobless Claims Weekly Report:  in the previous report the jobless claims rose by 18k to reach 354k; the next weekly report may affect the U.S dollar and consequently commodities and equities markets;

Friday, June 28th

  • 07:00 – German Retail Sales: This monthly report will show the shifts in German retail sales during May. In April 2013, retail sales declined by 0.4% – lower than many had anticipated; if this report will show another fall in sales then it might weakened the Euro;

Euro to USD Weekly Outlook

Following last week’s FOMC meeting, the sharp fall of the Euro might see a moderate correction. But if the US economy will keep showing signs of recovery, this could drag down the Euro/USD. Finally, if the German economic data that will be reported this week won’t show growth they could also adversely affect this currency pair.  

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