Will European currencies rebound against the strengthening U.S. dollar?
12.10.2021
- Germany's Wholesale Price Index
- Remarks by Clarida, Vice Chair of the Federal Reserve
Yesterday, the three major U.S. stock indices all continued to decline toward the close, with the S&P 500 ending at 4,361 points, down 0.69% from the previous day.The market saw falling stock prices, flat interest rates, and rising crude oil prices. Selling pressure on major U.S. financial firms, which are set to report earnings this week, also contributed to the decline. Additionally, Goldman Sachs’ downward revision of its U.S. economic growth forecasts for fiscal years 2021 and 2022 was another factor behind the drop in stock prices.
In the foreign exchange market, the Euro/USD pair is facing resistance as the Dollar Index has risen to 94.3, and it is currently trading around 1.155. However, given that the daily RSI is hovering near 30—a level considered oversold—it would be unwise to be overly optimistic about a sharp decline. In any case, we should monitor the situation closely without making any assumptions about the direction of the market.
Today’s schedule includes the UK ILO unemployment rate and employment figures at 3:00 PM, the German Wholesale Price Index at 3:00 PM, Turkey’s industrial production at 4:00 PM, the Eurozone ZEW Economic Sentiment Index at 6:00 PM, South Africa’s manufacturing output at 8:00 PM, and India’sIndustrial Production Index, at 10:00 PM, remarks by ECB President Lagarde, and at 12:15 AM, remarks by Fed Vice Chair Clarida. While keeping an eye on key speeches during U.S. trading hours today, I want to assess the relative strength of the U.S. dollar and European currencies.
Author: Keisuke Sakurai
