EUR/USD Monthly Fundamental Forecast September 2013 The EUR/USD eased to 1.3219 as traders looked for low risk assets pushing the US dollar over the 82 price level. At the same time eurozone problems continued to mount in Greece and Portugal. Syria and the Middle East will remain a factor this month along with the ECB meeting on Thursday but the US Fed tapering and the US recovery will be the main focus. Higher energy prices (should the recent spike in oil prices be sustained), a more sluggish recovery in emerging-market economies and confidence shocks stemming from US monetary policy shifts, political instability within certain members states or the need for additional financial assistance packages for peripheral countries could tip the region back into recession. Inflation likely moderated in August due to base effects, with the recent increase in oil prices yet to impact the CPI. Loans to households maintained a modest pace of expansion in July, while the contraction in business lending accelerated. The ECB is unlikely to change its policy stance for the time being Highest: 1.3452 Lowest: 1.3174 Difference: 0.0278 Average: 1.3321 Change %: 0.05 US markets will be on tenterhooks over the coming three weeks in the lead-up to the next FOMC meeting and with key data also on the way. The jobs trend has not been the Fed’s friend of late, but Thursday’s ADP and Friday’s nonfarm payrolls prints will be the last potentially influential releases facing a self-professed short-term data-dependent central bank. Consensus anticipates sub-200k prints in both that would be consistent with the recently slower pace of job gains. Job growth has been sub-200k for the past five straight months, the labor force participation rate sits at about 63% which is the lowest since 1979, and slack persists by way of the unemployment rate and the U6 underemployment rate that still sits at 14%. Fed speak will be rather light between now and the FOMC meeting with only five speeches on tap before the pre-meeting black-out on Fed communications, four of which are next week, and all by regional Fed Presidents only two of whom vote on the committee.
Posted on: Sun, 01 Sep 2013 14:49:34 +0000
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