Although there will be several important economic data publications pertaining to both Europe and the US over the coming week, there is the potential that they may not be highly impactful. This is due to the fact that the geopolitical situation in Greece has dominated Euro trade, and speculation regarding the timing of a Federal Reserve rate hike has overshadowed recent US data publications.
US Dollar (USD) Exchange Rate Forecast to Soften on Overvaluation
After the International Monetary Fund (IMF) warned the Federal Reserve that a rate hike this year could be premature and extend difficulties resulting from Dollar overvaluation, the ‘Greenback’ (USD) softened in spite of comparatively positive data publications. In addition, rumours surfaced that US President Barak Obama was also concerned about the high value of the North American asset.
Although there is a potential for US data to be less impactful, there will still be several economic indicators of significance over the coming week. Of particular importance will be the Federal Open Market Committee (FOMC) interest rate decision. Although the likelihood of a rate increase at this juncture is slim-to-none, there is the potential for fluctuations on any accompanied statement from US officials. Also of significance to those invested in the ‘buck’ (USD) will be the Consumer Price Index. Having fallen into negative territory, the median market forecast expects a return to inflation, albeit at a flat line figure.
Euro (EUR) Exchange Rate Forecast to Fluctuate as Greek Deadlines Loom
With several European officials showing open distain for the way Greece has approached talks to unlock aid, many feel that they will not be able to persuade the European Commission to allow bailout before the time frame for said credit expires. With time against the Hellenic nation, talks are likely to intensify over the coming week which out to see the shared currency fluctuate versus its peers.
In terms of domestic data, the most likely publication to provoke Euro volatility is the German ZEW Economic Sentiment Survey which hit 41.9 previously. In addition to the ZEW survey; the German Consumer Price index, German EU-Harmonised Consumer price Index, German ZEW Current Situation Survey, Eurozone ZEW Economic Sentiment Survey, Eurozone Consumer price Index, Eurozone Core Consumer Price Index and the European Central Bank Economic Bulletin may be of interest to those invested in the common currency.
In addition to US Inflation data and the FOMC decision; Industrial Production, Manufacturing Production, NAHB Housing Market Index, Net Long-Term TIC Flows, Mortgage Applications, Housing Starts, Building Permits, Initial Jobless Claims, Real Average Weekly Earnings, Philadelphia Fed, Leading Indicators and the Baker Hughes US Rig Count will be of interest to those invested in the Us Dollar.
As well as geopolitics in Greece having an effect on trader confidence, the situation in Ukraine is also worth watching as it could impact on market sentiment.
The US Dollar to Euro (USD/EUR) exchange rate was trending within the range of 0.8869 – 0.8960 during Friday’s European session.