News Feed

EUR/USD picks up amid positive data from Germany, risk-on markets

• The Euro edges up to 1.1535 as German IFO Business Climate improves beyond expectations..
• The US Dollar crosses are moving within tight ranges ahead of US-China trade developments, Fed’s decision.
• EUR/USD shows a mixed technical picture, bouncing between 1.1575 and 1.1650.

EUR/USD trims some losses and returns above 1.1640 from session lows at 1.1620, supported by a larger.than-expected recovery on German business sentiment on Monday. The pair, however, remains within previous ranges as investors bid their time awaiting developments from the trade negotiations between the US and China and the monetary policy decisions by the Federal ReserveFederal Reserve (Fed) and the European Central Bank (ECB) due later this week.

The positive comments coming from the talks between US and Chinese negotiators in Malaysia this weekend seem to have paved the path for a trade deal at the meeting between US President Donald Trump and his Chinese Counterpart, Xi Jinping, in South Korea, later on the week, that would at least allow for the extension of the trade truce between the world’s major economies.

The economic calendar is thin on Monday, and investors are likely to remain on the sidelines ahead of key events this week. The main focus will be on the outcome of the Fed’s monetary policy meeting, due on Wednesday, but the Eurozone’s Q3 preliminary Gross Domestic Product and the ECB’s monetary policy decision, both on Thursday, might have a significant impact on Euro volatility.

Investors are widely expecting a 25-basis-point interest rate cut by the Fed on Wednesday, especially after the soft US inflation report released last Friday. The main attraction of the event is likely to be the ensuing press conference by the central bank’s Chair Jerome Powell, whose comments will be carefully analysed to assess the chances of another quarter-point cut in December’s meeting.