EURUSD Plummets After Difficult Day in the Forex Markets

Joshua Crafter

euro and us dollarsThe euro dropped in value significantly during the trading day yesterday.

A series of statistical releases were in part responsible for the headaches – with business growth figures from Germany suggesting that there may be a decline on the cards.

Similar data from France reinforced the trend. It was revealed, for example, that manufacturing levels in the country were now at their lowest point in just over two years.

The EUR/USD pair slipped to $1.1422 over the course of the day, reflecting a 0.4% drop in value.

The problems for the currency were also caused in part by an ongoing row between the EU and Italy over the latter’s budget position.

The European Commission has instructed Italy to create a new budget within just three weeks – after the first one constituted what the Commission called “particularly serious non-compliance”.

The Japanese yen also suffered a little over the course of the day, dropping to 112.48 in the JPY/USD pair.

Forex traders will have other developments to keep their eyes on today and in the coming days, however.

In the US, there are a number of central banker speeches scheduled for later today, Wednesday October 24th. James Bullard, President of the Federal Reserve Bank of St. Louis, will speak at 3.30pm GMT, and two Federal Open Market Committee members will speak as well, one at 5pm GMT and one just after.

The Federal Reserve’s so-called Beige Book, meanwhile, will come out at 6pm GMT. This document aims to paint a picture of the economic outlook for the US by interviewing economists, business leaders and more in each of the 12 Federal Reserve districts.

Looking ahead to Thursday, the day is due to start with more business data releases in Germany, this time from CESifo Group.

Business climate information, as well as current assessments and expectations, are due out at 8am GMT. Given the role of German business releases in determining the euro’s performance today and yesterday, it is likely that this release will be watched closely.

US housing data will be on the way from 2pm GMT onwards, including pending home sales information for September. The month on month change here is expected to shift from -1.8% to -0.1%.

The day will conclude with the Tokyo consumer price index in Japan covering October, which is scheduled for release at 11.30pm GMT. Analysts predict that the part of the index which excludes fresh food will demonstrate no year on year change from the previous position of 1%.

On Friday, the day will commence with consumer confidence data for October from France – which is out at 6.45am GMT. This index is expected to remain still at 94.

US gross domestic product data, annualised for the third quarter of 2018, will be out at 12.30pm GMT. It is expected that this will show a slight drop from just over 4% to around 3.3%.

Core personal consumption expenditures in the country for the third quarter of 2018, meanwhile, are believed to be ready to show a quarter on quarter change from 2.1% to 1.8%.

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Joshua Crafter
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