Euro Dollar Fed ECB Outlook: Investors watched U.S. jobs and euro zone inflation statistics to determine central banks’ actions. They saw the euro’s slight decline against the dollar. The forthcoming German and Spanish inflation data could reveal a lot about the EU’s economy, analysts say. If the bloc’s figures are disclosed on Thursday, these should be released too.
In August, North Rhine-Westphalia, Germany’s most populous state, saw inflation rise from 5.8% to 5.9%. It was 5.8% July. This sluggish but consistent rise suggests that the European Central Bank (ECB) may not stop tightening the money supply as soon as some think. Spain reported August annual inflation of 2.6%, which was similar to economists’ expectations. This statistic is 0.3% greater than July.
Futures markets predict a 60% possibility of a 25 basis point ECB rate hike in September. Because much has been said about what might happen. The author warns that this fresh rate rise discussion is uncertain. The famous ING rates economist Benjamin Schroeder observed, “This coming time could very well be the last chance for fiscal hawks in the central bank.” Schroeder stressed the importance of the incoming inflation statistics in this complex financial equation.
A dollar index based on six major currencies rose 0.1% to 103.67. On the other side of the Atlantic. Before this increase, the dollar lost 0.39 percent, its worst day in a month and a half. Last 24 hours saw this number decline.
Also Read: Dollar Eases in Comparison to Euro Amid Economic Indicators
The alarming JOLTS job vacancies report, which plummeted to its lowest level in over two and a half years, caused this market slump.
Market watchers await Friday’s US non-farm payrolls report. The dollar’s recent decline is concerning. City Index’s smart market analyst Matt Simpson blames second-tier job numbers for the decrease and believes a lot of information will be disclosed this week.
The latest market data suggests an 86.5% possibility that interest rates will remain unchanged on September 20. Learn how the Federal Reserve handles money. However, the November meeting has a 50/50 likelihood of raising rates. In a recent interview, Federal Reserve Chairman Jerome Powell said the money supply must be tightened to control inflation. At the same time, he encouraged caution and smarts.
Shortly after, the Japanese yen reached 147.375, its highest level in ten months. Great tune. The Bank of Japan bought its own currency for the first time in almost a decade after this enormous surge. In Australia, inflation dropped to its lowest in 17 months. This makes the Reserve Bank of Australia unlikely to change the interest rate at its next policy meeting.
The Chinese yuan fell 0.3% in non-Far East transactions. This happened even though the People’s Bank of China established a larger domestic trade midpoint than financial experts expected.
Our Reader’s Queries
What is the euro dollar forecast for 2023?
The EUR/USD is expected to maintain its bullish momentum and surpass $1.10 by the end of 2023. This positive outlook is driven by ongoing expectations of Fed rate cuts, a favorable risk appetite, and a hawkish ECB. These factors are likely to continue supporting the EUR/USD in the early parts of 2024.
What is the long term forecast for the EURUSD?
According to recent reports, the EUR USD is predicted to hit 1.15 by the close of 2024. The banknotes suggest that the USD is currently overvalued and may weaken in the medium-term. However, the path to this outcome is uncertain and fraught with risks.
Will Euro USD go up or down?
The outlook for EUR/USD remains steady and the intraday bias is neutral. If the currency pair breaks below 1.0876, it will continue to fall from its short-term high of 1.1138 to reach 1.0722 support. On the other hand, if it breaks above 1.0997, the bias will shift to the upside and it will retest the high of 1.1138.
What is the Euro USD forecast for economics?
Bank of America has projected that the EUR/USD will hit 1.15 by the close of 2024. Despite the Eurozone’s anticipated sluggish growth, the currency pair is expected to gain strength due to the Federal Reserve’s rate cuts. Bank of America has estimated that the euro-dollar exchange rate is undervalued by approximately 15%.