Yahoo Finance EUR/USD Daily Fundamental Forecast – December 14, 2017
The euro gained by over 100 pips as the dollar weakened all across the board yesterday. We had warned about this possibility in our forecast yesterday as the risk for the dollar was to the downside with the CPI data and the Fed lined up for the day. It will be the turn of the euro today as it will be the center of focus when the ECB conducts its press conference and rate statement for today.
EURUSD Rises on Dollar Weakness
The euro chopped around during the first half of the day as it awaited data and events later in the day. The first one up was the CPI data from the US which came in as per expectations. This did not have too much of an impact on the dollar or the euro but there was a slow and steady rise of around 30 pips after the news. It was clear that the market was waiting for the Fed and its announcement. This came in late in the day but as expected, the Fed hiked rates. We had mentioned that this rate hike was already priced into the markets and what mattered was the statement following the hike.
This was where the Fed seemed to be dovish as the statement showed that 2 of the Fed members dissented on the rate hike and there were still some concerns surrounding the inflation and though the growth forecast had improved, the inflation forecast was generally unchanged. What this showed was the fact that the outlook for the future rate hikes in 2018 was largely dovish and this led to a sell off in the dollar which helped the euro to climb through the 1.18 region and it trades just below the 1.1850 region as of this writing.
Looking ahead to the rest of the day, we have the euro in the spotlight as the ECB has its press conference. We do not expect any fireworks following the press meet but we also have the retail sales data from the US which should bring in some volatility. It remains to be seen whether there will be a range breakout but if we dont get any over the next couple of days, expect some consolidation and ranging for the next 2 weeks as we wind down to the rest of the year.
This article was originally posted on FX Empire
