EUR/USD Fundamental Forecast – September 19, 2016

The EUR/USD dipped 20 points on a quiet trading day with little data on the calendar traders focused on next week’s FOMC meeting and ongoing problems with Italian banks. The euro is trading at 1.1224 dead center of its recent trading range. The US dollar gained 20 points as traders are now expected a rate increase in the US before the new year.

Some traders and analysts expect the BOJ to push back additional easing steps, while making its government bond buying more flexible to steepen the yield curve. Others expect the BOJ to launch fresh stimulus through a further push into negative territory and increased asset purchases. The past week has been dominated by a rethink on debt markets about the outlook for central bank policy in Europe and Japan. One currency leg of that looks to be the growing lack of belief that officials can do much to weaken either the euro or yen if the U.S. Federal Reserve does not raise interest rates.

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 September 19, 2016

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Government Bond Auctions

Date Time Country Auction

Sep 19 11:00 Belgium Holds OLO auction

Sep 20 11:30 UK Jul 2047 Gilt

Sep 21 10:30 Denmark Holds bond auction

Sep 21 11:03 Sweden Holds bond auction

Sep 21 11:30 Germany Eur 4bn 0% Oct 2021 Bobl

Sep 22 17:20 Italy Announces details of bond auction