EUR is cautious before ECB meeting
EUR is cautious before ECB meeting
Written by: PaxForex analytics dept - Thursday, 25 July 2019 0 comments
The rate of the single European currency shows a weak negative trend in relation to the US currency in trading on Thursday, awaiting a meeting of the European Central Bank, scheduled for today.
This morning, the euro against the dollar fell to 1.1135 dollars per euro from the previous close of 1.1139 dollars per euro. The exchange rate of the US currency to the yen fell to 108.12 yen over USD from yesterday's close of 108.17 yen. The dollar index fell by 0.01%, to 97.72 points.
The interest of traders is chained today to the ECB meeting. The euro has fallen in price since the beginning of July by 2% against the background of strengthening expectations that the European regulator is capable of weakening its own monetary policy due to the restraint of the global economic growth.
During this period, traders believe that the possibility of reducing the ECB rate on deposits by 10 basis points up to minus 0.5%, is 48%. At the same time, experts note that even if the ECB keeps its monetary policy unchanged, the head of the regulator, Mario Draghi, can provide a signal to lower the rate at a subsequent meeting in September.
In addition, investors continue to assess the pessimistic statistical information from the eurozone, according to which the composite index of business activity in industry and services (PMI) of the eurozone countries in July, according to preliminary estimates, fell to 51.5 points from 52.2 points last month, although it was expected to decrease to 52.1 points. Traders expect additional pressure on the euro, due to the lack of good fundamental signals from Europe.
Big attention of traders also focused on various rumors before the US Federal Reserve meeting next week. According to some of them, the American regulator may not go to a strong rate cut, as President Trump would like, but the US leader has another tool to stimulate the national economy - a selling of US currency. Traders should consider the likelihood of such a move.
During the meeting next week, the Fed is likely to reduce the range of rates by 0.25 percentage points. In the light of the current state of the American economy, such a decision is not so obvious, but Trump, apparently, would like to see an even stronger decline, which could adversely affect the rate of the US currency.
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Forex trading recommendations:
GBPUSD: Buy. Entry point – 1, 248. Take profit – 1, 2496. Stop Loss – 1, 2453.
AUDUSD: Buy. Entry point – 0, 6964. Take Profit – 0, 6979. Stop Loss – 0, 6938.
NZDUSD: Sell. Entry point – 0, 6709. Take Profit – 0, 6694. Stop Loss – 0, 6735.
This morning, the euro against the dollar fell to 1.1135 dollars per euro from the previous close of 1.1139 dollars per euro. The exchange rate of the US currency to the yen fell to 108.12 yen over USD from yesterday's close of 108.17 yen. The dollar index fell by 0.01%, to 97.72 points.
The interest of traders is chained today to the ECB meeting. The euro has fallen in price since the beginning of July by 2% against the background of strengthening expectations that the European regulator is capable of weakening its own monetary policy due to the restraint of the global economic growth.
During this period, traders believe that the possibility of reducing the ECB rate on deposits by 10 basis points up to minus 0.5%, is 48%. At the same time, experts note that even if the ECB keeps its monetary policy unchanged, the head of the regulator, Mario Draghi, can provide a signal to lower the rate at a subsequent meeting in September.
In addition, investors continue to assess the pessimistic statistical information from the eurozone, according to which the composite index of business activity in industry and services (PMI) of the eurozone countries in July, according to preliminary estimates, fell to 51.5 points from 52.2 points last month, although it was expected to decrease to 52.1 points. Traders expect additional pressure on the euro, due to the lack of good fundamental signals from Europe.
Big attention of traders also focused on various rumors before the US Federal Reserve meeting next week. According to some of them, the American regulator may not go to a strong rate cut, as President Trump would like, but the US leader has another tool to stimulate the national economy - a selling of US currency. Traders should consider the likelihood of such a move.
During the meeting next week, the Fed is likely to reduce the range of rates by 0.25 percentage points. In the light of the current state of the American economy, such a decision is not so obvious, but Trump, apparently, would like to see an even stronger decline, which could adversely affect the rate of the US currency.
Open free Forex account>
Forex trading recommendations:
GBPUSD: Buy. Entry point – 1, 248. Take profit – 1, 2496. Stop Loss – 1, 2453.
AUDUSD: Buy. Entry point – 0, 6964. Take Profit – 0, 6979. Stop Loss – 0, 6938.
NZDUSD: Sell. Entry point – 0, 6709. Take Profit – 0, 6694. Stop Loss – 0, 6735.