- EUR/USD promoted the signs of the imminent US -uropheral union deal before the August deadline.
- American sustainable goods recall orders, but unemployed claims remain strong, Fed support expectations.
- ECB keeps rates stable; The next week’s focus turns on the major Fed policy decision on 30 July.
EUR/USD increased by about 1% a week on Friday, yet after the United States (US) economic data ended the daily session flat, which was worse than expected, but offset by positive trade news. With the loss of greenback cutting, the pair trades at 1.1741, virtually unchanged.
The latest trade news suggests that the US and the European Union (EU) may be close to a deal. Economic Dock in the US revealed that after posting the stallers double-proclaimed figures in May, sustainable goods disappointed investors, as indicated by the US Department of Commerce. Nevertheless, strong unemployed figures, despite the weak manufacturing activity shown by S&P Global Manufacturing PMI, promoted investors’ response to the next week’s meeting to exempt a low dowish Federal Reserve.
In the European Union, the European Central Bank maintained the rates unchanged, adopting a meeting-by-meeting approach between a division between doves and hawks in the governing council, adopted a meeting-by-meeting approach between doves and hacks in the governing council. Friday’s program was vacant, although the calendar will be packed next week.
European Union – American Trade News
US President Donald Trump said he was with an agreement with China. Regarding the European Union, he said that there is a chance, but said that he may have to reduce his tariff.
Earlier during the week, it was reported that the US had made a deal with Japan, promoting EUR/USD. Another leg-up was obtained after the Financial Times (FT) that the European Union and the US are ready to sign a deal before the August 1 deadline, as mentioned by sources familiar with the case.
Next week, fomc is in the headlines
The Federal Open Market Committee (FOMC) will meet on 29-30 July in the US Economic Schedule. The fed is expected to be unchanged, with 98% likely to maintain rates in the range of 4.25% -4.50%.
Daily Digest Market Movers: Eur/USD integrates after ECB’s decision, bad US data
- The US durable goods order for June drops 9.6% of the mother, rapidly reversed by an increase of 16.5% of May, as the demand for aircraft demand. Despite the fall, the figures were better than -10.8% of the contraction forecast by analysts, with a recession led by transport equipment, which fell 22.4% during the month. Order of core durable goods – exhaling unstable transport category up to 0.2%, indicate a minor but continuous power in the underlying business investment.
- On Thursday, better-preferred initial unemployed claims pointed to the strength of the labor market, even S&P Global reported contractions in manufacturing activity.
- In American trade development, President Donald Trump announced that most of the trade deals have now been finalized. He said that upcoming letters are expected to outline tariff rates from 10% to 15% and it is said that there is a possibility of an agreement with the European Union “50-50” opportunity.
- Despite this, the European Union member states have been designed to vote on US goods on Eur 93 billion counter-tariffs on Thursday, and the broad majority of members of the European Union will support any American trade deal and an American tariff of 30%using anti-carntile instruments in the event of American tariffs.
- The ECB kept unchanged rates at 2% unchanged as an erection, highlighting the statement that the data came roughly to the previous evaluation, while saying that due to uncertainty, their approach would be completed by the meeting.
- Next week, the US Economic Dock will include Fed’s decisions, gross domestic product (GDP) initial figures Q2, the release of core PCE figures and nonform payroll data.
- In the European Union, the schedule will include retail sales in Germany and Spain, as well as inflation figures for Spain, Germany and the European Union. Traders are also eyeing the release of GDP print for the European Union and Germany.
Technical approach: EUR/USD consolates at around 1.1750
EUR/USD is integrated after killing a weekly high of 1.1788, only shy to the major 1.1800 level. While the relative power index (RSI) remains in the rapid area, the speed is decreasing as an indicator near its neutral area.
A brake below a 20-day simple moving average (SMA) at 1.1714 can open the door for a retract of 1.1700 support. Further negative side will highlight the 50-day SMA on 1.1556. On the contrary, a continuous speed above 1.1800 was viewed at 1.1829 at 1.1850 at 1.1850, at 1.1850.
Euro sub -procurement
Euro 19 is the currency for the countries of the European Union that belong to Eurozone. This is the second most trading currency in the world behind the US dollar. In 2022, it was responsible for 31% of all forex transactions, with the average daily turnover $ 2.2 trillion more than a day. EUR/USD is the world’s heaviest business currency pair, which is accounting for all transactions estimated from all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
Frankfurt is the Reserve Bank for European Central Bank (ECB), Eurozone in Germany. The ECB determines interest rates and manages monetary policy. The primary mandate of ECB is to maintain value stability, which means to either control inflation or stimulate growth. Its primary tool is to increase or reduce interest rates. Relatively high interest rates – or compared to high rates – usually will benefit the euro and vice versa. The ECB Governing Council takes the monetary policy decision in the meetings held eight times a year. Decisions are made by Eurozone national banks and heads of six permanent members, including ECB President, Christine Lagard.
Eurozone inflation data, measured by the harmonious index of consumer value (HICP), is an important economical for the euro. If inflation increases more than expected, especially if above 2% target of ECB, it binds the ECB to raise interest rates to bring it under control. Relatively high interest rates will usually benefit the euro than its counterparts, as it makes the region more attractive as a place to park its money for global investors.
The data releases the health of the economy and can affect the euro. Indicators like GDP, manufacturing and services PMI, employment and consumer spirit survey can all affect the direction of single currency. A strong economy is good for the euro. Not only does it attract more foreign investment, but it can also encourage ECB to keep interest rates, which will directly strengthen the euro. Otherwise, if the economic data is weak, the euro is likely to fall. Economic data is particularly important for the four largest economies in the Euro region (Germany, France, Italy and Spain), as they are 75% of the Eurozone economy.
Another important data release for the euro is the business balance. Measure the difference between what this indicator earns from its exports and what spends on imports over a certain period. If a country makes excessive demand after exports, its currency will receive purely value from the additional demand made from foreign buyers to buy these goods. Therefore, a positive pure business balance strengthens a posture and contrast to a negative balance.
