Fundamental Market Analysis for August 14, 2024 EURUSD
The Euro-dollar pair is trading on a flat note near 1.09900 in the early European session on Wednesday. Traders are opting for a wait-and-see approach ahead of important economic data releases from the Eurozone and the US. Keep a close eye on the Eurozone's gross domestic product (GDP) for the second quarter (Q2) and the US consumer price index (CPI) for July.
Data released by the Bureau of Labor Statistics on Tuesday showed that the Producer Price Index (PPI) for US final demand rose 2.2% y/y in July versus 2.7% in the previous month, lower than the 2.3% expected. The monthly PPI increased 0.1% y/y after rising 0.2% in June. The core PPI, which excludes volatile food and energy prices, rose 2.4% y/y in July, up from 3.0% in June, below the market consensus forecast of 2.7%.
Markets expect the Federal Reserve (Fed) to cut rates by 25 basis points (bps) in September, while a 50 bps rate cut in September is not out of the question, but it will be entirely data dependent. Atlanta Fed President Raphael Bostic on Tuesday emphasized that the latest economic data has given him "more confidence" that the Fed will be able to bring inflation back to the 2% target. Still, more evidence is needed before he would be willing to support an interest rate cut.
The Eurozone economy is estimated to have grown 0.3% in the second quarter from the previous quarter and 0.6% from a year earlier. Weaker than expected GDP growth figures may have a negative impact on the Euro (EUR) exchange rate against the US Dollar (USD).
Trading recommendation: Watch the level of 1.09900 if the level is fixed above, take Buy positions. On the rebound take Sell positions.
Data released by the Bureau of Labor Statistics on Tuesday showed that the Producer Price Index (PPI) for US final demand rose 2.2% y/y in July versus 2.7% in the previous month, lower than the 2.3% expected. The monthly PPI increased 0.1% y/y after rising 0.2% in June. The core PPI, which excludes volatile food and energy prices, rose 2.4% y/y in July, up from 3.0% in June, below the market consensus forecast of 2.7%.
Markets expect the Federal Reserve (Fed) to cut rates by 25 basis points (bps) in September, while a 50 bps rate cut in September is not out of the question, but it will be entirely data dependent. Atlanta Fed President Raphael Bostic on Tuesday emphasized that the latest economic data has given him "more confidence" that the Fed will be able to bring inflation back to the 2% target. Still, more evidence is needed before he would be willing to support an interest rate cut.
The Eurozone economy is estimated to have grown 0.3% in the second quarter from the previous quarter and 0.6% from a year earlier. Weaker than expected GDP growth figures may have a negative impact on the Euro (EUR) exchange rate against the US Dollar (USD).
Trading recommendation: Watch the level of 1.09900 if the level is fixed above, take Buy positions. On the rebound take Sell positions.
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