The single European currency once again shows signs of reaction as it has already returned to the levels of 1,0350 covering a significant part of the last losses.
As we reported yesterday , statements by officials of the European central bank maintain the environment that Ecb should follow a more aggressive policy in future interest rate increases.
While, respectively, a Fed official mentioned once again in his speech that he expects very soon the increase on interest rates by federal central bank of America will slowdown.
The above were the main catalysts that limited the European currency losses and leaded it again in a upward reaction.
At the same time, the stabilization in the stock markets and a climate of calm does not favor the US currency, which traditionally functions as a safe haven currency.
Today’s agenda is particularly rich in announcements, something that is expected to increase volatility and there may be sharp fluctuations in both directions.
The important indicators for the development of the manufacturing sector in the eurozone and in the United States are awaited with particular interest, also the new homes sales , Durable Goods Orders , Initial Jobless Claims, and The Minutes from the last Fed’s meeting complete a rich calendar.
In this environment with such a variety of announcements and developments we would give an increased probability of a highly volatile traded day and it would be very difficult for all the news to be so favorable for one currency or the other that we would observe a strong move in only one direction.
I would hardly see the single European currency come back and maintain levels above 1,04 , unless all the news will favorable this perspective something that would surprise me.