EURUSD continues to climb with the support of strong European data
Last Updated on June 16, 2021
EURUSD Outlook – 16th June 2021
EURUSD continued to rise in the morning of Tuesday’s trading in the European market and recorded the second daily gain in light of the continued recovery from its lowest level in a month recorded earlier in trading, in addition to the strong economic data that was issued.
The Eurozone has recently been released, and investors are looking forward to the start of the Federal Reserve’s meeting today, and the results of the meeting to be released tomorrow, Wednesday, and it is likely that it will reveal clearly the future of US monetary policy in light of persistently high inflation rates.
The EURUSD pair traded at the level of $1.2147, up by 0.25% from the opening level of today’s session at $1.2118, and it closed yesterday’s trading with gains of about 0.1% within the recovery operations from the lowest level since last May 15 at $1.2092, which was recorded on Friday.
EURUSD awaiting for Industrial production data
Eurozone industrial production performed well in April as more European countries reopened, according to the data, the region’s industrial production rose 0.8% in April from March’s 0.4% reading, this increase was better than the median estimate of 0.4 As a result, production rose at an annual rate of 39.3% due to last year’s low base.
The growth of the industrial sector was attributed to a 3.4% increase in consumer durables, followed by a 3.2% increase in the energy sector. Capital goods and intermediate goods also increased by 1.4% and 0.8%, respectively. Countries such as Belgium, Malta, and Estonia were the best performers in the bloc while Denmark was Hungary and Lithuania are the underdeveloped countries.
The strong industrial production data came a few days after the European Central Bank announced its interest rate decision, as the bank left interest rates and quantitative easing policies unchanged and pledged to accelerate the pace of asset purchases.
Looking ahead, EUR/USD will react to the latest interest rate decision from the Federal Reserve which will be released tomorrow, analysts believe that the bank will leave its monetary policy unchanged, however, investors are unlikely to look at whether the bank will insist on The recent strong inflation numbers are temporary, as there is likely to be a new bearish bullish tone for this pair.
The pair will also react to a slew of economic data from the US, among which will be retail sales, home construction, Producer Price Index (PPI), and building permits.
The US dollar is falling ahead of the FED’s meeting
The US dollar fell against most of the major currencies for the second day in a row, as markets awaited the Federal Reserve’s decisions to be released tomorrow, Wednesday.
The dollar index traded at 90.44 points, down by 0.1% from the opening level.
The biggest focus among dollar index investors is the upcoming Federal Reserve interest rate decision, and analysts expect the bank led by “Jerome Powell” to leave interest rates and quantitative easing policy unchanged.
However, investors will be looking to see if the bank will mention the term temporary inflation in its closing statement, especially since the Fed has insisted on leaving monetary policy unchanged because recent strong inflation numbers are temporary.
The Fed’s decision comes at an important time for the US economy, where the government has already vaccinated millions of people and provided trillions of dollars in stimulus, and lawmakers in Washington are discussing the next trillion-dollar infrastructure package.
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