On Thursday, October 14, by the end of the day, the euro rose in price against the US dollar by 0.03%, to 1.1597. At the beginning of the European session, the price rallied to 1.1624 amid declining 10-year bond yields and a general weakening of the US dollar. Gold touched $ 1800 for the first time since mid-September.
The positions of the euro buckled after the statements of Christine Lagarde and the fall of the EUR/GBP cross pair. She said that the Bank continues to believe that the rise in inflation is largely due to temporary factors. Price pressures could be resilient if supply problems last longer or wages rise more than currently expected.
After the release of American statistics, the correction for the dollar continued. The euro rate returned to the level of 1.1584.
The number of Americans applying for unemployment benefits for the first time last week decreased by 36 thousand, to 293 thousand, the lowest since the beginning of the COVID-19 pandemic in March 2020. US producer prices (PPI) jumped 8.6% in September compared to the same month a year earlier (the forecast was 8.7%). Prices have reached their maximum growth rate since the beginning of the calculation of the indicator (November 2010).
Scheduled statistics (GMT +3):
- At 12:00 in the eurozone will be released a report with data on the trade balance for August.
- At 15:30, the US is to publish a report on the volume of retail trade for September, as well as to release the index of activity in the manufacturing sector from the Federal Reserve Bank of New York for October.
- At 17:00, the US will release the University of Michigan Consumer Sentiment Index for October.
- At 20:00, Baker Hughes will report data on the number of active oil rigs.
Current situation:
Morning is like yesterday. Major currencies are trading in positive territory, except for the yen. New Zealander and Canadian occupy the first two lines.
Patrick Harker, President and Chief Executive Officer of the Federal Reserve Bank of Philadelphia, could raise the demand for risky assets. He said he did not expect a rate hike until late 2022 or early 2023. In his opinion, in 2021, inflation will be 4%, and next year it will drop to “just over” 2%. GDP growth is expected to be about 5.5% in 2021 and 3.5% in 2022. Harker is also in favor of reducing the QE program, like his colleagues.
Now the attention of traders has switched to the publication of monthly data on retail sales in the United States, the consumer sentiment index from the University of Michigan and the dynamics of US bonds.
Technical analysis:
At the auctions in Asia, the euro recovered to 1.1606. The EUR/GBP cross is still on the side of buyers, so from the European session there is a likelihood of a test of the level of 1.1635 (90 g). The main statistics for the United States are out. Now, within the framework of the corrective movement, you can go to the level of 1.17 until the next meeting of the FOMC.
Summary: on Thursday, the single currency closed slightly higher. In the first half of the day, the price increased to 1.1625. Growth was limited by K. Lagarde's statements about inflation, as well as by American statistics. The overall sentiment for the euro is positive. On Friday, buyers pushed the price back to the 1.1607 level. If the yield on UST10 falls below 1.50% per annum, then the growth of the EUR/USD pair will accelerate.