One of our favorite currencies in the weeks ahead is the euro. On a fundamental basis the outlook for the Eurozone is positive. According to the most recent economic reports, inflation, spending and retail sales activity improved in Germany, the Eurozone’s largest economy. The uptick in activity hardens the central bank’s resolve to normalize monetary policy in October. ECB President Mario Draghi made it clear this past week that the bulk of QE decisions will be made in this month. Although he also added that they have to be sensitive about not halting the recovery and careful about hasty moves, if data continues to improve their announcement to taper will be accompanied by plans for more changes in the coming months.
The week started with election uncertainty but the euro has finally stabilized as investors realize that at the end of the day Angela Merkel will still be leading the country. It won’t be long before a coalition government is formed and EUR/USD traders could celebrate the announcement by driving the currency higher on the elimination of election uncertainty.
The week started with election uncertainty but the euro has finally stabilized as investors realize that at the end of the day Angela Merkel will still be leading the country. It won’t be long before a coalition government is formed and EUR/USD traders could celebrate the announcement by driving the currency higher on the elimination of election uncertainty.
Comment:
key resistance
