It’s about time! Thanks to positive data, the euro was able to bag 111 pips from the dollar for the first time this week yesterday when it closed higher at 1.4319. It was also able to end its 5-day losing streak against the yen when EUR/JPY closed the day 68 pips higher at 110.21.
Yesterday we saw an upward revision to the euro zone’s final services PMI to 51.6 after being reported at 51.4. But what made the euro bulls’ day was the retail sales report for June which printed a 0.9% uptick and topped the market’s expected 0.5% forecast. Apparently, the surge in consumer spending was led by Germany.
I wonder if the German economy would continue to impress markets today when it releases its factory orders report for June which is expected to print a 0.4% decline later at 10:00 am GMT. However, I don’t think that the data would be the primary driver in the euro’s price action in today’s trading.
At 11:45 am GMT, the ECB will announce its interest rate decision. Although no one is expecting ECB head honcho Jean-Claude Trichet to holler an interest rate hike, that doesn’t mean you can just forget about it!
Make sure you stick around your charts around 12:30 pm GMT when he takes center stage for the press conference and keep an ear out for what he has to say.
As Forex Gump mentioned in his article last Saturday, recent disappointment in economic data may give the ECB a reason to sound dovish while increased inflationary pressures could be enough for Trichet to say that the bank would show “strong vigilance” against inflation.
Just remember to be careful, ayt? Good luck y’all!