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On Monday, trading on the single currency closed up against the dollar. There was an intraday rise of over 0.6%, where the price almost reached the 1.1000 mark.
The Euro rally started on Friday after the release of some weak figures for the US. On Monday the 15th of May, growth on the EUR/USD pair was even stronger as commodity currencies strengthened against the dollar. They appreciated in response to a 3.5% bump in the price of oil to 52.58 USD.
This rise in oil prices was supported by energy company shares. Stock indices went up as exchanges opened in the US. In fact, market participants were so engrossed by the oil rally that they failed to take note of North Korea’s nuclear tests as well as the cyber-attack over the weekend that disrupted the work of car factories, hospitals, shops and schools.
Just as oil went into a correctional phase, the market’s major currency pairs followed suit. The Euro/dollar rate then fell to 1.0966.
Market expectations:
Trading in Asia has seen the rate restored to 1.0990. I’m envisaging a weakening of the Euro until it meets with the Lb balance line. The news of OPEC’s agreement started an oil rally, which in turn has had a positive effect on commodity currencies. That which didn’t work out on Monday will work out another day. I’m expecting to see a correctional phase from the 135th degree to 1.0954. There’s plenty of news to go around today, and as it comes out, we can expect some increased market volatility.
Day’s news (GMT+3):
- 11:30 UK: CPI (Apr), PPI – input (Apr), retail price index (Apr), CPI core (Apr), DCLG house price index (Apr);
- 12:00 Eurozone: preliminary GDP data (Q1), trade balance (Mar), ZEW survey – economic sentiment (May). Germany: ZEW survey – economic sentiment (May);
- 15:30 USA: building permits (Apr), housing starts (Apr);
- 16:15 USA: capacity utilisation (Apr), industrial production (Apr);
- 16:30 UK: Conference Board leading index (Mar);
- 17:00 USA: outstanding mortgage debt (Q1).
