EUR/USD: Euro-zone’s economy to continue its strong momentum in the second half of 2017: ECB’s economic bulletin


EURUSD Movement

For the 24 hours to 23:00 GMT, the EUR rose 0.41% against the USD and closed at 1.1642.

According to the European Central Bank’s (ECB) latest economic bulletin, the solid and broad-based economic recovery in the common currency region is likely to continue unabated into the second half of this year, aided by upswing in business investment and robust domestic demand.

Meanwhile, the European Commission, in its Autumn Forecast report, lifted the Euro-zone’s 2017 growth forecast, predicting the fastest economic expansion in a decade. The commission now expects the single currency-bloc to grow 2.2% in 2017, up from 1.7% forecasted earlier in May.

Separately, Germany’s seasonally adjusted trade surplus widened more-than-expected to €24.1 billion in September, compared to market consensus for a surplus of €22.3 billion. The nation had reported a revised trade surplus of €20.1 billion in the previous month.

The greenback lost ground against its major counterparts, amid lingering uncertainty over US tax reforms after the Senate revealed that its proposed tax plan would push the long-awaited corporate tax cuts to 2019.

On the macro front, first time claims for the US unemployment benefits climbed more-than-anticipated to a level of 239.0K in the week ended 04 November, compared to a level of 229.00 K in the previous week. Markets were anticipating initial jobless claims to rise to a level of 232.00 K. Further, the nation’s seasonally adjusted final wholesale inventories advanced 0.3% on a monthly basis in September, confirming the preliminary print. In the previous month, wholesale inventories had registered a revised rise of 0.8%.

In the Asian session, at GMT0400, the pair is trading at 1.1649, with the EUR trading 0.06% higher against the USD from yesterday’s close.

The pair is expected to find support at 1.1608, and a fall through could take it to the next support level of 1.1566. The pair is expected to find its first resistance at 1.1673, and a rise through could take it to the next resistance level of 1.1696.

Amid a lack of major macroeconomic releases in the Euro-zone today, investors will look forward to the US flash Michigan consumer sentiment index for November, slated to release later today.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

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