Attention on European currency movements following the release of the ECB meeting minutes

Attention on European currency movements following the release of the ECB meeting minutes

26.08.2021

Yesterday, the three major U.S. stock indices all extended their gains, creating a risk-on market characterized by rising stocks, interest rates, and crude oil prices. WTI crude oil rose to $67.70. Gold fell by about 150 pips during U.S. trading hours yesterday and is currently trading around $1,786. The yield on the 10-year U.S. Treasury note has rebounded to 1.33%, indicating that bonds are being sold off.

In contrast to the weakening U.S. dollar, the euro has risen against the dollar in the foreign exchange market, breaking above its recent high of 1.176 on the hourly chart. From a technical perspective, the price is currently just below the 20-day moving average (MA) on the daily chart, so we need to carefully assess whether it will pull back from the 20-day MA. Meanwhile, the euro remains in a stalemate against the pound, another European currency, and is currently trading around 0.855.

Today’s economic indicators include the German GfK Consumer Confidence Survey at 3:00 PM, the release of the minutes from the ECB’s July Governing Council meeting at 8:30 PM, U.S. initial jobless claims and the revised U.S. second-quarter GDP at 9:30 PM,U.S. personal consumption, at 23:30, U.S. weekly natural gas inventories, at 24:00, the U.S. Kansas City Fed Manufacturing Activity Index, and at 26:00, a U.S. 7-year Treasury auction. We intend to closely monitor the direction of U.S. interest rates, which have begun to rise again, and the direction of the U.S. dollar.