Will the Market Wait and See How Far the Euro Can Rise Despite the Decline in the PPI?
04.09.2025
- Retail Sales in Europe
- U.S. PMI (Purchasing Managers' Index)
In U.S. trading yesterday, the Canadian dollar hit its weakest level during U.S. trading hours after Canada’s second-quarter labor productivity, released yesterday, fell to -1.0% from the previous reading of 0.2%. While other yen crosses rose, the CAD/JPY pair fell.It fell from 108.026 to 107.220. On the 4-hour chart, price action shows a regression from the +3σ Bollinger Band back toward the centerline, while on the daily chart, a divergence is emerging as the RSI gradually moves lower.
European currencies saw the euro rise against the U.S. dollar, despite yesterday’s release of the Eurozone’s July Producer Price Index (PPI), which showed a year-over-year increase of 0.2%, down from 0.6% the previous month. The euro rose against the U.S. dollar from 1.1608 to 1.1679.On the hourly chart, the price rose from the -3σ to the +3σ Bollinger Bands. On the 4-hour chart, the price has broken above the 200 SMA with a real body candle within a zone where short- and long-term moving averages are clustered, while on the daily chart, it remains within the range established last month, just below the 20 MA.
Today’s schedule includes Japan’s foreign and domestic securities investment data at 8:50, remarks by RBA Deputy Governor Hauser at 10:00, Australia’s trade balance at 10:30, the UK’s construction PMI at 17:30, Eurozone retail sales at 18:00,6:00 PM South Africa’s current account balance, 8:30 PM U.S. Challenger layoff figures, 9:15 PM U.S. ADP employment report, 9:30 PM U.S. initial jobless claims and U.S. trade balance,U.S. PMI at 10:45 p.m., U.S. ISM Non-Manufacturing Index at 11:00 p.m., and remarks by U.S. Federal Reserve Bank of New York President Williams at 1:05 a.m. Given the decline in the PPI, we intend to cautiously monitor the euro’s upside potential.
Author: Keisuke Sakurai
