EUR/USD Daily Fundamental Analysis for August 01, 2011

The EUR/USD will start the week on Monday with heavy volatility as the market continues to react to the weak GDP and the progress in the debt talks.

The deadline is approaching and US lawmakers are to reach the final decision to avert default, which might ease the pessimism slightly, yet the overall downside pressures prevail.

The euro will still be pressured by the fear of the spreading debt crisis to Spain after Moody’s warned of a downgrade and Zapatero called for early elections.

Also on Monday, Germany will start with the final revision for the PMI Manufacturing for July at 07:55 GMT and expected unrevised from the flash estimate with the slowing pace from June at 52.1.

The euro area is set to release the final revision for the PMI Manufacturing for July at 08:00 GMT and expected to maintain the slowing pace from June unrevised from the advanced estimate of 50.4.

At 09:00 GMT the euro area unemployment is due and expected steady at 9.9% in June.

The Institute for Supply Management manufacturing index will be released from the United States at 14:00 GMT, where the ISM manufacturing index is expected to ease further in July to 55.0 from 55.3 reported back in June.

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