EUR/USD has weakened on Wednesday, as the pair trades below the 1.33 line. The euro has surrendered about 100 points so far this week, and has fallen to its lowest level since September 2013. It’s a quiet day on the release front, highlighted by the Federal Reserve minutes. In the Eurozone, German numbers continue to struggle, as PPI came in at -0.1%, shy of the estimate of 0.0%.
 Here is a quick update on what’s moving the pair.
- EUR/USD edged lower in the Asian session and the euro continues to drop in European trade.
- Current range: 1.3333 to 1.3415.
Further levels in both directions:
- Below: 1.32, 1.3104 and 1.2984
- Above: 1.3295, 1.3333, 1.3415, 1.3450 and 1.35
- 1.32 is providing support.
- 1.3333, a key line, has switched to resistance as the euro continues to lose ground. 1.3415 is next.
EUR/USD Fundamentals
- 6:00 German PPI. Estimate 0.0%., actual -0.1%.
- 14:30 US Crude Oil Inventories. Estimate -1.3M.
- 18:00 US FOMC Meeting Minutes.
*All times are GMT.
For more events and lines, see the EUR/USDEUR/USDEUR/USDEUR/USDEUR/USD.
EUR/USD Sentiment
- Fed minutes in spotlight: All eyes are on the Federal Reserve, which will release the minutes of its last policy meeting later on Wednesday. Traders looking for clues as to when the Fed will press the trigger and raise interest rates, but Fed chair Janet Yellen might not oblige. US growth numbers have been positive, but job data could be better and inflation remains very low. The Fed’s QE scheme is scheduled to wind up in October, and a rate hike appears to be a question of timing. On Friday, Fed chair Janet Yellen will give a speech in Jackson Hole at a gathering of financial leaders, her first as head of the Fed. The speech will be closely watched. Will she take a step forward and acknowledge the recovery or remain extra cautious?
- US inflation numbers remain low: The US recovery has been moving in the right direction, but inflation numbers in the US remain feeble. On Tuesday, CPI and Core CPI, the primary gauges of consumer inflation, both posted paltry gains of 0.1%. These weak readings followed PPI, a manufacturing inflation index, which also came in at 0.1% last month. Weak inflation is one reason why the Federal Reserve is in no rush to raise interest rates, as low inflation points to slack in the economy.
- No growth in the Eurozone: The lack of growth in the Eurozone continue to raise concerns. The euro-zone output remained unchanged in Q2. French preliminary GDP remained flat at 0.0%, unchanged from a month earlier. German preliminary GDP slipped to -0.2%, the first contraction in the German economy since Q4 of 2012. Other numbers, such as German business confidence, remain pressured.
- German, French inflation remains sluggish: The ECB has tried to stave off deflation concerns with interest rate cuts, but inflation levels have not risen. Eurozone Final CPI dipped to 0.4%, down from 0.5% a month earlier. Draghi did not seem worried about this, but did go to explain why EUR/USD should slide..
- Geopolitical conflicts could rattle markets: Hotspots in Ukraine and the Middle East remain tense and could have dramatic effects on the markets. In eastern Ukraine, more fighting has been reported between Ukrainian forces and pro-Russian separatists, and large numbers of Russian forces remain close to the border. In Iraq, Kurdish forces, aided by US air strikes, are battling with Islamic State militants. As political turmoil continues in Iraq, the national government is becoming increasingly irrelevant. In Gaza, the fighting has renewed between Israel and Hamas as the latest ceasefire broke down on Tuesday.
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