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    Tough week for the Euro ahead

    Last week has once again proved, that the first quarter wasn’t very much successful for the German economy (I’ve already mentioned it in my earlier post from 15 April). A series of disappointing reports came out:

    • ZEW economic sentiment index fell from 54.8 to 53.3 in April after 5-month strengthening, while analysts expected growth;
    • Markit PMI for the month of April weren’t encouraging either. PMI Manufacturing slipped from 52.8 to 51.9, PMI services registered 54.4 after the previous 55.4. As a result, Composite PMI also fell from 55.4 to 54.2 after 4 months of growth (see Chart).

    germany-composite-pmi27-4-15

    Weak German reports didn’t produce very much impact on the Euro though. Maybe the market considered this decline in the readings as correction after the continuing strengthening. Besides, other Eurozne countries except for France registered better preliminary PMI results.

    I believe, that this week, investors will focus on the more important upcoming events when making projections regarding the EUR/USD pair. These events are:

    —  situation around Greece.

    The deadline for the approval of comprehensive reform package according to which Athens will be able to count on further financial assistance the Eurozone is getting close. On Thursday, April 23, after a closed meeting with Greek Prime Minister Alexis Tsipras in Brussels, German Chancellor Angela Merkel said: “We must do everything so that Greece does not run out of money.” However, the comments of Eurozone finance ministers who arrived the next day in Riga to discuss the Greek question, showed little hope for progress in the negotiations. As a result, their skepticism was justified: the Greeks didn’t make any clear proposals, the ministers did not give “green light” to the new loan for the troubled country.

    The markets are waiting for the solution to be finally found in this already rather boring story in the near future. Reacting to news from Greece the euro/dollar can either dramatically strengthen or sharply weaken this week.

    — Fed meeting on 29 April. 

    Although I don’t expect any important decisions to be made during this meeting, investors will be looking for the signals that will help them understand whether the idea of the summer rate hike is completely buried. The accompanying statement and comments by the regional Fed presidents will affect the exchange rate of the dollar, which in its turn will affect the EUR/USD dynamics.

    Well, it’s going to be a tough week for the Euro…

     

    Dear traders, please post your comments to our forecasts and share your own opinion. Your ideas can be very helpful for the newcomers in the forex market. Thank you!

    Last week has once again proved, that the first quarter wasn’t very much successful for the German economy (I’ve already mentioned it in my earlier post from 15 April). A series of disappointing reports came out:

    • ZEW economic sentiment index fell from 54.8 to 53.3 in April after 5-month strengthening, while analysts expected growth;
    • Markit PMI for the month of April weren’t encouraging either. PMI Manufacturing slipped from 52.8 to 51.9, PMI services registered 54.4 after the previous 55.4. As a result, Composite PMI also fell from 55.4 to 54.2 after 4 months of growth (see Chart).

    germany-composite-pmi27-4-15

    Weak German reports didn’t produce very much impact on the Euro though. Maybe the market considered this decline in the readings as correction after the continuing strengthening. Besides, other Eurozne countries except for France registered better preliminary PMI results.

    I believe, that this week, investors will focus on the more important upcoming events when making projections regarding the EUR/USD pair. These events are:

    —  situation around Greece.

    The deadline for the approval of comprehensive reform package according to which Athens will be able to count on further financial assistance the Eurozone is getting close. On Thursday, April 23, after a closed meeting with Greek Prime Minister Alexis Tsipras in Brussels, German Chancellor Angela Merkel said: “We must do everything so that Greece does not run out of money.” However, the comments of Eurozone finance ministers who arrived the next day in Riga to discuss the Greek question, showed little hope for progress in the negotiations. As a result, their skepticism was justified: the Greeks didn’t make any clear proposals, the ministers did not give “green light” to the new loan for the troubled country.

    The markets are waiting for the solution to be finally found in this already rather boring story in the near future. Reacting to news from Greece the euro/dollar can either dramatically strengthen or sharply weaken this week.

    — Fed meeting on 29 April. 

    Although I don’t expect any important decisions to be made during this meeting, investors will be looking for the signals that will help them understand whether the idea of the summer rate hike is completely buried. The accompanying statement and comments by the regional Fed presidents will affect the exchange rate of the dollar, which in its turn will affect the EUR/USD dynamics.

    Well, it’s going to be a tough week for the Euro…

     

    Dear traders, please post your comments to our forecasts and share your own opinion. Your ideas can be very helpful for the newcomers in the forex market. Thank you!


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