© Dukascopy Bank SA
The pair opened the week on a rather neutral note, since expectations for upcoming rate hike in the US lent equal support to both currencies. The pair was trading on a 1.13 mark during European morning trade. In the middle of the week, the Dollar trimmed gains, after data showed that US inflation ticked lower last month and as investors remained cautious ahead of the Federal Reserve's highly-anticipated policy statement. According to the Commerce Department, consumer prices edged down by 0.1% last month, in line with forecasts following a 0.1% increase in July. However, the Greenback sold off sharply, since the US central bank left short-term interest rates unchanged, amid concerns over soft inflation and the effects of recent market volatility on the US economy. The Fed said it wanted to see "some further improvement in the labor market," and be "reasonably confident" that inflation will increase before hiking rates. As a result, the trading week was closed at the 1.125 mark.
On a weekly basis, the sentiment on this currency pair remains the same, as still only 42% of traders predict the Euro to decline. Among important news, on Wednesday, the Euro zone is to publish preliminary data on manufacturing and service sector activity. Moreover, the European Central Bank President Mario Draghi is to testify on monetary policy before the European Parliament's Economic and Monetary Committee, in Brussels, in the same day. The next day, the IFO Institute is to report on German business climate while the US is to release data on durable goods orders, initial jobless claims as well as new home sales. Also, traders could pay attention to the American revised data on second quarter economic growth and a revised report on consumer sentiment.
© Dukascopy Bank SA