The euro could turn its direction down with short-term risks against the US dollar


Euro has been working to break the corridor where it has been trading for two years against the US dollar. On the other hand, the strategists of the European finance companies like UBS Group AG and Deutsche Bank AG warn their customers about the euro’s short-term downside risks, recently supported by funding from the Euro Zone.

Technical indicators and option pricing also point to a downward movement in the euro. Before the European Central Bank‘s policy meeting to be held next week, the recently announced Euro Zone inflation data remained below the economists’ forecasts.

The euro has increased against the dollar this week, climbing above 1.12, although the European Central Bank‘s reluctance to withdraw monetary incentives due to inflation worries.

The Euro – Dollar pair traded slightly lower at a level of 1.1231 on Thursday compared to the opening price at 13:30 GMT.

US index futures contracts did not change much due to the fact that attention turned to employment data.  The employment data that will be released on Friday will give a clue about the situation of the largest economy of the world and about how interest rates could be affected from this.

The S & P 500 index futures contracts unchanged at 06:02 New York time and remained at 2,412.25 levels. Similar-term Dow Jones contracts stayed at 20,999 level. The S & P 500 Index closed 0.1 percent below Wednesday.

With the Fed meeting in 2 weeks, the eyes are on the employment data which will be announced on Friday in the US and with which approximately 180,000 position increases will be realized. Speaking in Seoul, San Francisco Fed President John Williams said that if the US economy strengthens, the Fed could increase interest rates four times in 2017.

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